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Recall and Unemployment

75 Pages Posted: 26 Sep 2017  

Shigeru Fujita

Federal Reserve Bank of Philadelphia

Giuseppe Moscarini

Cowles Foundation for Research in Economics; Yale University - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: 2017-06-29

Abstract

We document in the Survey of Income and Program Participation covering 1990- 2013 that a surprisingly large share of workers return to their previous employer after a jobless spell and experience very different unemployment and employment outcomes than job switchers. The probability of recall is much less procyclical and volatile than the probability of finding a new employer. We add to a quantitative, and otherwise canonical, search-and-matching model of the labor market a recall option, which can be activated freely following aggregate and job-specific productivity shocks. Recall and search effort significantly amplify the cyclical volatility of new job-finding and separation probabilities.

Keywords: Recall, unemployment, duration, matching function, business cycles

JEL Classification: E24, E32, J64

Suggested Citation

Fujita, Shigeru and Moscarini, Giuseppe, Recall and Unemployment (2017-06-29). FRB of Philadelphia Working Paper No. 17-29. Available at SSRN: https://ssrn.com/abstract=3041842

Shigeru Fujita (Contact Author)

Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

Giuseppe Moscarini

Cowles Foundation for Research in Economics ( email )

Box 208281
New Haven, CT 06520-8281
United States

HOME PAGE: http://economics.yale.edu/people/giuseppe-moscarini

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States
203-432-3596 (Phone)

HOME PAGE: http://www.econ.yale.edu/~mosca/mosca.html

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