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Temporary layoffs and split population models

Author

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  • Kostas G. Mavromaras

    (University of Aberdeen, UK)

  • Chris D. Orme

    (University of Manchester, UK)

Abstract

This paper develops and estimates a split population model for the duration of temporary layoffs in the German labour market; the population being split according to whether a layoff is temporary or permanent. A flexible piecewise constant hazard is employed and the recall propensity is used to condition the duration of a temporary layoff. The distinction between factors that influence the recall propensity and factors that influence the duration of a temporary layoff is shown to be of empirical significance. The results of the paper are used to evaluate implicit contract and search theories of temporary layoffs. The paper suggests that implicit contracts can explain the behaviour of unemployed workers with high worker-firm attachment whilst search can explain the behaviour of workers with low worker-firm attachment. Copyright © 2004 John Wiley & Sons, Ltd.

Suggested Citation

  • Kostas G. Mavromaras & Chris D. Orme, 2004. "Temporary layoffs and split population models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(1), pages 49-67.
    • Handle: RePEc:jae:japmet:v:19:y:2004:i:1:p:49-67
    DOI: 10.1002/jae.734
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    References listed on IDEAS

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    Cited by:

    1. Alfonso Alba & Jose Maria Arranz & Fernando Muñoz-Bullón, 2012. "Re-employment probabilities of unemployment benefit recipients," Applied Economics, Taylor & Francis Journals, vol. 44(28), pages 3645-3664, October.
    2. Virve Ollikainen & Tomi Kyyrä, 2006. "To Search or Not to Search? The Effects of UI Benefit Extension for the Elderly Unemployed," Discussion Papers 400, Government Institute for Economic Research Finland (VATT).
    3. Oskar Jost, 2022. "See you soon: fixed-term contracts, unemployment and recalls in Germany—a linked employer–employee analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(3), pages 601-626, August.
    4. World Bank, 2005. "Bosnia and Herzegovina : Labor Market Update, The Role of Industrial Relations," World Bank Publications - Reports 8461, The World Bank Group.
    5. Sanjiv Jaggia, 2011. "Identifiability of the misspecified split hazard models," Applied Economics, Taylor & Francis Journals, vol. 43(24), pages 3441-3447.
    6. Alba-Ramirez, Alfonso & Arranz, Jose M. & Munoz-Bullon, Fernando, 2007. "Exits from unemployment: Recall or new job," Labour Economics, Elsevier, vol. 14(5), pages 788-810, October.
    7. Núria Rodríquez-Planas, 2011. "Displacement, Signaling, and Recall Expectations," Working Papers 550, Barcelona School of Economics.
    8. Kyyrä, Tomi & Ollikainen, Virve, 2008. "To search or not to search? The effects of UI benefit extension for the older unemployed," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2048-2070, October.

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