The Recall and New Job Search of Laid-Off Workers: A Bivariate Proportional Hazard Model with Unobserved Heterogeneity

35 Pages Posted: 6 Aug 2003

See all articles by Bruce Fallick

Bruce Fallick

Federal Reserve Bank of Cleveland

Keunkwan Ryu

Seoul National University - School of Economics; Osaka University

Date Written: March 2003

Abstract

Workers who lose their jobs can become re-employed either by being recalled to their previous employers or by finding new jobs. Workers' chances for recall should influence their job search strategies, so the rates of exit from unemployment by these two routes should be directly related. We solve a job search model to establish, in theory, a negative relationship between the recall and new job hazard rates. We look for evidence in the PSID by estimating a semi-parametric competing risks model with explicitly related hazards. We find only a small negative behavioral relationship between recall and new job hazard rates.

Keywords: Lay-off, recall, job search, hazard rate, proportional hazard model, unobserved heterogeneity, duration dependence

JEL Classification: J64, C41

Suggested Citation

Fallick, Bruce and Ryu, Keunkwan, The Recall and New Job Search of Laid-Off Workers: A Bivariate Proportional Hazard Model with Unobserved Heterogeneity (March 2003). Available at SSRN: https://ssrn.com/abstract=419800 or http://dx.doi.org/10.2139/ssrn.419800

Bruce Fallick (Contact Author)

Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
Cleveland, OH 44101-1387
United States

Keunkwan Ryu

Seoul National University - School of Economics ( email )

San 56-1, Silim-dong, Kwanak-ku
Seoul 151-742
Korea
82-2-880-6397 (Phone)
82-2-886-4231 (Fax)

Osaka University ( email )

1-1 Yamadaoka
Suita
Osaka, 565-0871
Japan

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