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Unemployment Insurance and the Timing of Layoffs and Recalls

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  • Štěpán Jurajda

Abstract

. This note provides the motivation to fill a gap in the empirical literature by showing that the optimal firm response to workers’ job search behaviour (Mortensen, Industrial and Labor Relations Review 30: 505–517, 1977) is to lay off those workers with high unemployment insurance and recall workers as they approach expiry of their benefits.

Suggested Citation

  • Štěpán Jurajda, 2003. "Unemployment Insurance and the Timing of Layoffs and Recalls," LABOUR, CEIS, vol. 17(3), pages 383-389, September.
    • Handle: RePEc:bla:labour:v:17:y:2003:i:3:p:383-389
    DOI: 10.1111/1467-9914.00245
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    References listed on IDEAS

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    1. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    2. Christopher A. Pissarides, 1982. "Job Search and the Duration of Layoff Unemployment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 97(4), pages 595-612.
    3. Burdett, Kenneth & Hool, Bryce, 1983. "Layoffs, wages and unemployment insurance," Journal of Public Economics, Elsevier, vol. 21(3), pages 325-357, August.
    4. Haltiwanger, John, 1984. "The Distinguishing Characteristics of Temporary and Permanent Layoffs," Journal of Labor Economics, University of Chicago Press, vol. 2(4), pages 523-538, October.
    5. Feldstein, Martin S, 1976. "Temporary Layoffs in the Theory of Unemployment," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 937-957, October.
    6. Card, David & Levine, Phillip B., 1994. "Unemployment insurance taxes and the cyclical and seasonal properties of unemployment," Journal of Public Economics, Elsevier, vol. 53(1), pages 1-29, January.
    7. Baily, Martin Neil, 1977. "On the Theory of Layoffs and Unemployment," Econometrica, Econometric Society, vol. 45(5), pages 1043-1063, July.
    8. Azariadis, Costas, 1975. "Implicit Contracts and Underemployment Equilibria," Journal of Political Economy, University of Chicago Press, vol. 83(6), pages 1183-1202, December.
    9. Patricia M. Anderson & Bruce D. Meyer, 1994. "The Effects of Unemployment Insurance Taxes and Benefits on Layoffs Using Firm and Individual Data," NBER Working Papers 4960, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Albanese, Andrea & Picchio, Matteo & Ghirelli, Corinna, 2020. "Timed to Say Goodbye: Does Unemployment Benefit Eligibility Affect Worker Layoffs?," Labour Economics, Elsevier, vol. 65(C).
    2. Gutierrez, Italo A., 2016. "Job insecurity, unemployment insurance and on-the-job search. Evidence from older American workers," Labour Economics, Elsevier, vol. 41(C), pages 228-245.
    3. Rebollo-Sanz, Yolanda, 2012. "Unemployment insurance and job turnover in Spain," Labour Economics, Elsevier, vol. 19(3), pages 403-426.
    4. Jurajda, Stepan, 2002. "Estimating the effect of unemployment insurance compensation on the labor market histories of displaced workers," Journal of Econometrics, Elsevier, vol. 108(2), pages 227-252, June.
    5. Rafael Lalive & Josef Zweim�ller, "undated". "Benefit Entitlement and the Labor Market: Evidence from a Large-Scale Policy Change," IEW - Working Papers 105, Institute for Empirical Research in Economics - University of Zurich.

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