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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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    8. Fernando Galindo-Rueda, 2003. "Employer learning and schooling-related statistical discrimination in Britain," LSE Research Online Documents on Economics 19491, London School of Economics and Political Science, LSE Library.
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    19. George A. Akerlof & Andrew K. Rose & Janet L. Yellen, 1990. "Waiting for work," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    20. Limor Golan, 2005. "Counteroffers and Efficiency in Labor Markets with Asymmetric Information," Journal of Labor Economics, University of Chicago Press, vol. 23(2), pages 373-393, April.
    21. Alexandros Zangelidis, 2008. "Occupational And Industry Specificity Of Human Capital In The British Labour Market," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(4), pages 420-443, 09.
    22. Harry Krashinsky, 2002. "Evidence on Adverse Selection and Establishment Size in the Labor Market," ILR Review, Cornell University, ILR School, vol. 56(1), pages 84-96, October.
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    25. Laing, D., 1990. "Involuntary Layoffs in a Model with Asymmetry Information Concerning Worker Ability," Papers 12-90-4, Pennsylvania State - Department of Economics.
    26. Michael Podgursky & Paul Swaim, 1987. "Job Displacement and Earnings Loss: Evidence from the Displaced Worker Survey," ILR Review, Cornell University, ILR School, vol. 41(1), pages 17-29, October.
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