Playing Hard to Get: Theory and Evidence on Layoffs, Recalls and Unemployment
Given the importance of recall to previous employer in the United States, I provide both theoretical and empirical analyses of an asymmetric information model with an endogenous layoff-rehire process. I show that taking into account the possibility of recalls has important implications for the study of post-displacement earnings and unemployment duration of laid-off workers in the US. I find that high-productivity laid-off workers may choose unemployment over a low paid job, even though they may not be recalled.
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|Date of creation:||Jan 1998|
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