Mandatory Notice and Unemployment
The authors use newly available data from the Ontario Ministry of Labour to estimate the effects of advance notification of permanent layoff on unemployment durations. While notice is strongly negatively correlated with unemployment in the raw data, most of this effect disappears when they control for personal characteristics and when they correct for endogeneity of notice by using only its cross-firm variation to identify its effects. Overall, while short notice intervals can have a substantial effect on the probability of experiencing a short unemployment spell, the authors find that even very long notice intervals have little impact on long-term unemployment. Copyright 1995 by University of Chicago Press.
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