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Displacement, Signaling, and Recall Expectations

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  • Núria Rodríquez-Planas
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    This paper is the first to present empirical evidence consistent with models of signaling through unemployment and to uncover a new stylized fact using the 1988-2006 DWS, namely that, among white-collar workers, post-displacement earnings fall less rapidly with unemployment spells for layoffs than for plant closings. Because high-productivity workers are more likely to be recalled than low-productivity ones, they may choose to signal their productivity though unemployment, in which case the duration of unemployment may be positively related to post-displacement wages. Identification is done using workers whose plant closed as they cannot be recalled, and no incentives to signal arise.

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    File URL: http://www.barcelonagse.eu/sites/default/files/working_paper_pdfs/550.pdf
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    Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 550.

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    Date of creation: Apr 2011
    Handle: RePEc:bge:wpaper:550
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