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Recall Expectations and Duration Dependence

Author

Listed:
  • Arash Nekoei
  • Andrea Weber
Abstract
Using novel administrative data from Austria, we investigate the nature of temporary layoffs and recalls. We find that on average jobs ending in temporary layoffs lasted shorter but paid higher wages. The majority of temporarily laid-off workers return to their previous employer, but also one-fifth of those permanently laid-off are recalled. Compared to job switchers, recalls have shorter unemployment spells and do not experience wage losses. Negative duration dependence of unemployment only appears once recall exits are excluded for temporary and permanent layoffs. However, for temporary layoffs, the aggregate pattern masks significant heterogeneity by pre-unemployment tenure. Additional survey evidence suggests a lower average search level for temporary layoffs.

Suggested Citation

  • Arash Nekoei & Andrea Weber, 2015. "Recall Expectations and Duration Dependence," American Economic Review, American Economic Association, vol. 105(5), pages 142-146, May.
    • Handle: RePEc:aea:aecrev:v:105:y:2015:i:5:p:142-46
    Note: DOI: 10.1257/aer.p20151064
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    References listed on IDEAS

    as
    1. Arash Nekoei & Andrea Weber, 2017. "Does Extending Unemployment Benefits Improve Job Quality?," American Economic Review, American Economic Association, vol. 107(2), pages 527-561, February.
    2. Emilia Del Bono & Andrea Weber, 2008. "Do Wages Compensate for Anticipated Working Time Restrictions? Evidence from Seasonal Employment in Austria," Journal of Labor Economics, University of Chicago Press, vol. 26(1), pages 181-221.
    3. Lawrence F. Katz, 1986. "Layoffs, Recall and the Duration of Unemployment," NBER Working Papers 1825, National Bureau of Economic Research, Inc.
    4. Alfred Stiglbauer & Florian Stahl & Rudolf Winter-Ebmer & Josef Zweimüller, 2003. "Job Creation and Job Destruction in a Regulated Labor Market: The Case of Austria," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 30(2), pages 127-148, June.
    5. Feldstein, Martin S, 1976. "Temporary Layoffs in the Theory of Unemployment," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 937-957, October.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Korpela, Heikki, 2024. "Furlough unemployment," Working Papers 167, VATT Institute for Economic Research.
    2. David R. Agrawal & Aline Bütikofer, 2022. "Public finance in the era of the COVID-19 crisis," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(6), pages 1349-1372, December.
    3. Hall, Robert E. & Kudlyak, Marianna, 2022. "The unemployed with jobs and without jobs," Labour Economics, Elsevier, vol. 79(C).
    4. Stefano Della & Jörg Heining & Johannes F Schmieder & Simon Trenkle, 2023. "Evidence on Job Search Models from a Survey of Unemployed Workers in Germany," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(2), pages 1181-1232.
    5. Altmann, Steffen & Falk, Armin & Jäger, Simon & Zimmermann, Florian, 2018. "Learning about job search: A field experiment with job seekers in Germany," Journal of Public Economics, Elsevier, vol. 164(C), pages 33-49.
    6. Mueller, Andreas I. & Spinnewijn, Johannes, 2023. "The Nature of Long-Term Unemployment: Predictability, Heterogeneity and Selection," CEPR Discussion Papers 17913, C.E.P.R. Discussion Papers.
    7. Cockx, Bart & Declercq, Koen & Dejemeppe, Muriel & Inga, Leda & Van der Linden, Bruno, 2020. "Switching from an inclining to a zero-level unemployment benefit profile: Good for work incentives?," Labour Economics, Elsevier, vol. 64(C).
    8. Rainer Eppel & Thomas Horvath & Helmut Mahringer, 2018. "Das Aussetzen von Beschäftigungsverhältnissen als betriebliche Strategie zum Ausgleich von Schwankungen des Personalbedarfs. Ein Update," WIFO Monatsberichte (monthly reports), WIFO, vol. 91(11), pages 799-810, November.
    9. Gürtzgen, Nicole & (né Nolte), André Diegmann & Pohlan, Laura & van den Berg, Gerard J., 2021. "Do digital information technologies help unemployed job seekers find a job? Evidence from the broadband internet expansion in Germany," European Economic Review, Elsevier, vol. 132(C).
    10. Rainer Eppel & Thomas Horvath & Helmut Mahringer, 2017. "Die Auswirkungen temporärer Layoffs auf die weitere Erwerbskarriere der betroffenen Arbeitskräfte," WIFO Working Papers 539, WIFO.
    11. Fieldhouse, Andrew & Howard, Sean & Koch, Christoffer & Munro, David, 2022. "A New Claims-Based Unemployment Dataset: Application to Postwar Recoveries Across U.S. States," GLO Discussion Paper Series 1066, Global Labor Organization (GLO).
    12. Braun, Christine & Engelhardt, Bryan & Griffy, Benjamin & Rupert, Peter, 2020. "Testing the independence of job arrival rates and wage offers," Labour Economics, Elsevier, vol. 63(C).
    13. Lachowska, Marta & Meral, Merve & Woodbury, Stephen A., 2016. "Effects of the unemployment insurance work test on long-term employment outcomes," Labour Economics, Elsevier, vol. 41(C), pages 246-265.
    14. Oskar Jost, 2022. "See you soon: fixed-term contracts, unemployment and recalls in Germany—a linked employer–employee analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(3), pages 601-626, August.
    15. Rainer Eppel & Thomas Horvath & Helmut Mahringer, 2018. "Das Aussetzen von Beschäftigungsverhältnissen als betriebliche Strategie zum Ausgleich schwankenden Personalbedarfs. Ein Update," WIFO Studies, WIFO, number 61245, March.
    16. Stefano Della & Jörg Heining & Johannes F Schmieder & Simon Trenkle, 2022. "Evidence on Job Search Models from a Survey of Unemployed Workers in Germany [Reference-Dependent Preferences: Evidence from Marathon Runners]," The Quarterly Journal of Economics, Oxford University Press, vol. 137(2), pages 1181-1232.
    17. Kyyrä, Tomi & Pesola, Hanna & Rissanen, Aarne, 2017. "Unemployment Insurance in Finland: A Review of Recent Changes and Empirical Evidence on Behavioral Responses," Research Reports 184, VATT Institute for Economic Research.
    18. Bernardus Van Doornik & David Schoenherr & Janis Skrastins, 2018. "Unemployment Insurance, Strategic Unemployment and Firm-Worker Collusion," Working Papers Series 483, Central Bank of Brazil, Research Department.
    19. Stefano DellaVigna & Attila Lindner & Balázs Reizer & Johannes F. Schmieder, 2017. "Reference-Dependent Job Search: Evidence from Hungary," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(4), pages 1969-2018.
    20. Nekoei, Arash & Weber, Andrea, 2020. "Seven Facts about Temporary Layoffs," CEPR Discussion Papers 14845, C.E.P.R. Discussion Papers.
    21. Rainer Eppel & Thomas Horvath & Helmut Mahringer & Christine Zulehner, 2015. "Temporäre Layoffs – Das kurzfristige Aussetzen von Arbeitsverhältnissen und seine Bedeutung für die Arbeitslosigkeit," WIFO Monatsberichte (monthly reports), WIFO, vol. 88(12), pages 885-897, December.
    22. Andreas Gulyas, 2018. "Identifying Labor Market Sorting with Firm Dynamics," 2018 Meeting Papers 856, Society for Economic Dynamics.

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    More about this item

    JEL classification:

    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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