Seven Facts about Temporary Layoffs
31 Pages Posted: 10 Jul 2020
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Seven Facts about Temporary Layoffs
Seven Facts About Temporary Layoffs
Date Written: June 17, 2020
Abstract
We establish seven facts about temporary layoffs (TL), whose employers communicated an anticipated recall date at layoff:
(1) The higher the current TL share at firm/industry-level, the higher (lower) the future recall (layoff) likelihood for both temporary and permanent layoffs (employees);
(2) TL is more prevalent in: the upper-middle part of the wage distribution,
(3-4) in mass layoffs and recessions;
(5) The later the communicated recall date, the lower the accepted new-job wage, unconditional and conditional on non-employment duration;
(6) TLs' new-job hazard rate (wage) jumps (drops) when recall likelihood falls;
(7) Extending unemployment benefits increases separations in recall-intense sectors.
Keywords: temporary layoff, recall, unemployment
JEL Classification: J31, J33, J63, J68
Suggested Citation: Suggested Citation