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Barcelona GSE Working Papers Series
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Barcelona GSE Working Paper No. 550 | | Title: | Displacement, Signaling, and Recall Expectations | | Authors: | Néria Rodréguez-Planas | | Date: | 12-04-2011 | | Keywords: | Asymmetric information, laid-off workers, recalls, unemployment, and wages | | JEL Codes: | J60, J30 | | Abstract: | | This paper is the first to present empirical evidence consistent with models of signaling through unemployment and to uncover a new stylized fact using the 1988-2006 DWS, namely that, among white-collar workers, post-displacement earnings fall less rapidly with unemployment spells for layoffs than for plant closings. Because high-productivity workers are more likely to be recalled than low-productivity ones, they may choose to signal their productivity though unemployment, in which case the duration of unemployment may be positively related to post-displacement wages. Identification is done using workers whose plant closed as they cannot be recalled, and no incentives to signal arise. | | Download this working paper in PDF format (343.91 Kb) |  List of all recent working papers |
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