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Advance Notice and Job Search: The Value of an Early Start

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  • Paul Swaim
  • Michael Podgursky

Abstract

Recent studies of the effect of advance notice on jobless duration following displacement misspecify the relationship between these two variables by treating advance notice as a dummy regressor in conventional survival time models. Job search theory, however, suggests that the major impact of advance notice is not to alter the efficiency of search after job loss, but rather to allow workers to begin search before job loss. The authors develop a "sequential-regimes" job search model which allows search prior to displacement for workers with advance knowledge of layoff, with different search intensities before and after layoff. Maximum-likelihood estimates of the model are then computed using a pooled data set from the 1984 and 1986 Displaced Worker Surveys. Advance knowledge is found to significantly shorten jobless duration for most labor force groups. Using these estimates, the authors simulate the effect of various levels of advance knowledge on jobless duration. Their results indicate that relatively modest advance notice substantially benefits many displaced workers.

Suggested Citation

  • Paul Swaim & Michael Podgursky, 1990. "Advance Notice and Job Search: The Value of an Early Start," Journal of Human Resources, University of Wisconsin Press, vol. 25(2), pages 147-178.
    • Handle: RePEc:uwp:jhriss:v:25:y:1990:i:2:p:147-178
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    Citations

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    Cited by:

    1. Peter Kuhn, "undated". "Canada and the "OECD Hypothesis": Does Labour Market Inflexibility Explain Canada's High Level of Unemployment?," Canadian International Labour Network Working Papers 10, McMaster University.
    2. Friesen, Jane, 2005. "Statutory firing costs and lay-offs in Canada," Labour Economics, Elsevier, vol. 12(2), pages 147-168, April.
    3. McCall, Brian P, 1997. "The Determinants of Full-Time versus Part-Time Reemployment Following Job Displacement," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 714-734, October.
    4. Audra Bowlus & Lars Vilhuber, 2001. "Displaced Workers, Early Leavers, and Re-employment Wages," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20015, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    5. Santos, Miguel, 2010. "From Training to Labour Market. Holocletic Model," MPRA Paper 26617, University Library of Munich, Germany.
    6. Hagen, Tobias, 2003. "Do Fixed-Term Contracts Increase the Long-Term Employment Opportunities of the Unemployed?," ZEW Discussion Papers 03-49, ZEW - Leibniz Centre for European Economic Research.
    7. Vera Brenčič, 2010. "Do Employers Respond to the Costs of Continued Search?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(2), pages 221-245, April.
    8. Miguel Baião Santos, 2010. "Inserção no Mercado de Trabalho e Formação Profissional - Guia Teórico para Decisores," Working Papers wp052010, Socius, Socio-Economics Research Centre at the School of Economics and Management (ISEG) of the Technical University of Lisbon.
    9. Mark Harcourt & Maureen Hannay & Helen Lam, 2013. "Distributive Justice, Employment-at-Will and Just-Cause Dismissal," Journal of Business Ethics, Springer, vol. 115(2), pages 311-325, June.
    10. Partridge, Mark D. & Rickman, Dan S., 1998. "Regional differences in chronic long-term unemployment," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(2), pages 193-215.
    11. Kahn, Lawrence M., 2012. "Temporary jobs and job search effort in Europe," Labour Economics, Elsevier, vol. 19(1), pages 113-128.
    12. David M. Gray & Pierre Grenier, 1994. "Fermetures d'usines et durées du chômage : signaux et comportements de recherche d'emploi au Canada," Économie et Prévision, Programme National Persée, vol. 113(2), pages 207-217.
    13. Stephen Seninger, 1997. "Jobless spells and re-employment wages," Applied Economics, Taylor & Francis Journals, vol. 29(9), pages 1169-1177.
    14. Christopher J. Ruhm & Jackqueline L. Teague, 1995. "Parental Leave Policies in Europe and North America," NBER Working Papers 5065, National Bureau of Economic Research, Inc.
    15. 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.
    16. Swaim, Paul & Podgursky, Michael, 1994. "Female Labor Supply Following Displacement: A Split-Population Model of Labor Force Participation and Job Search," Journal of Labor Economics, University of Chicago Press, vol. 12(4), pages 640-656, October.
    17. Santos, Miguel, 2010. "School to Work Transition, Employment Attainment and VET. Theories Guide for Policy Makers," MPRA Paper 24056, University Library of Munich, Germany.
    18. Tahira M. Probst & Lixin Jiang, 2016. "Mitigating Physiological Responses to Layoff Threat: An Experimental Test of the Efficacy of Two Coping Interventions," IJERPH, MDPI, vol. 13(3), pages 1-15, March.
    19. Burdett, Kenneth & Cunningham, Elizabeth J, 1998. "Toward a Theory of Vacancies," Journal of Labor Economics, University of Chicago Press, vol. 16(3), pages 445-478, July.

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