American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Recall and Unemployment
American Economic Review
vol. 107,
no. 12, December 2017
(pp. 3875–3916)
(Complimentary)
Abstract
We 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.Citation
Fujita, Shigeru, and Giuseppe Moscarini. 2017. "Recall and Unemployment." American Economic Review, 107 (12): 3875–3916. DOI: 10.1257/aer.20131496Additional Materials
JEL Classification
- 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