Recall and Unemployment
- (pp. 3875-3916)
AbstractWe document in the Survey of Income and Program Participation covering the period 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.
CitationFujita, Shigeru, and Giuseppe Moscarini. 2017. "Recall and Unemployment." American Economic Review, 107 (12): 3875-3916. DOI: 10.1257/aer.20131496
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- E32 Business Fluctuations; Cycles
- J63 Labor Turnover; Vacancies; Layoffs
- J64 Unemployment: Models, Duration, Incidence, and Job Search