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A Puzzling Aspect of the Effect of Advance Notice on Unemployment

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  • John T. Addison
  • McKinley L. Blackburn

Abstract

Displaced workers with generous periods of advance notice are more likely than their non-notified counterparts to avoid post-displacement unemployment altogether, but once unemployed, they tend to escape from unemployment much more slowly. The authors, using data from the five-year retrospective 1988 and 1990 Displaced Worker Surveys, examine three potential explanations for this puzzle: delaying behavior induced by the receipt of unemployment insurance, nonrandom distribution of notice to workers, and previous studies' failure to appropriately incorporate the pre-displacement search time of notified workers. This analysis supports the third explanation. After allowing for less intense search prior to displacement than following displacement, the authors find that the pattern of escape rates for otherwise observationally equivalent workers does not differ by notification status.

Suggested Citation

  • John T. Addison & McKinley L. Blackburn, 1997. "A Puzzling Aspect of the Effect of Advance Notice on Unemployment," ILR Review, Cornell University, ILR School, vol. 50(2), pages 268-288, January.
    • Handle: RePEc:sae:ilrrev:v:50:y:1997:i:2:p:268-288
    DOI: 10.1177/001979399705000205
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    References listed on IDEAS

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    Cited by:

    1. Addison, John T. & Blackburn, McKinley L., 2000. "The effects of unemployment insurance on postunemployment earnings," Labour Economics, Elsevier, vol. 7(1), pages 21-53, January.
    2. Pedersen, Peder J. & Smith, Nina, 2001. "International Migration and Migration policy in Denmark," CLS Working Papers 01-5, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
    3. Ortega, J., 2000. "Job Rotation as a Mechanism for Learning," Papers 00-04, Centre for Labour Market and Social Research, Danmark-.
    4. Irma Mooi-Reci & Ronald Dekker, 2015. "Fixed-Term Contracts: Short-Term Blessings or Long-Term Scars? Empirical Findings from the Netherlands 1980–2000," British Journal of Industrial Relations, London School of Economics, vol. 53(1), pages 112-135, March.
    5. Westergaard-Nielsen, Niels, 2001. "Danish Labour Market Policy: Is it worth it?," CLS Working Papers 01-10, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.

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