Advance Layoff Notices and Aggregate Job Loss

72 Pages Posted: 5 Feb 2020 Last revised: 3 Feb 2022

See all articles by Pawel Michal Krolikowski

Pawel Michal Krolikowski

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Kurt G. Lunsford

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Date Written: February 2, 2022

Abstract

We collect data from Worker Adjustment and Retraining Notification (WARN) Act notices and establish their usefulness as an indicator of aggregate job loss. The number of workers affected by WARN notices ("WARN layoffs") leads state-level initial unemployment insurance claims, and changes in the unemployment rate and private employment. WARN layoffs move closely with aggregate layoffs from Mass Layoff Statistics and the Job Openings and Labor Turnover Survey, but are timelier and cover a longer sample. In a vector autoregression, changes in WARN layoffs lead unemployment rate changes and job separations. Finally, they improve pseudo real-time forecasts of the unemployment rate.

Data associated with this paper are available at OpenICPSR: https://doi.org/10.3886/E155161V1

Keywords: WARN Act, mass layoffs, unemployment, dynamic factor model

JEL Classification: C32, E24, E27, J63, J65

Suggested Citation

Krolikowski, Pawel Michal and Lunsford, Kurt G., Advance Layoff Notices and Aggregate Job Loss (February 2, 2022). FRB of Cleveland Working Paper No. 20-03R, Available at SSRN: https://ssrn.com/abstract=3531229 or http://dx.doi.org/10.2139/ssrn.3531229

Pawel Michal Krolikowski (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

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

Kurt G. Lunsford

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

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

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