Mandatory Advance Notice of Layoff: Evidence and Efficiency Considerations

نویسندگان

چکیده

We investigate a prevalent, but understudied, employment protection policy: mandatory advance notice (MN), requiring employers to notify employees of forthcoming layoffs. MN increases future production, as notified workers search on the job, reduces current production they supply less effort. Our theoretical model captures this trade-off and predicts that improves efficiency by increasing information sharing, whereas large losses can be avoided worker-firm agreements side-payments â?? severance pay in lieu MN. provide evidence such response an extension using novel Swedish administrative data. then estimate gain MN: extending period leads shorter non-employment duration higher reemployment wages, plausibly driven on-the-job search. Using variation across firms, we productivity loss notice. The estimates benefits costs suggest has positive net impact offering empirically-grounded argument for mandating

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ژورنال

عنوان ژورنال: Social Science Research Network

سال: 2021

ISSN: ['1556-5068']

DOI: https://doi.org/10.2139/ssrn.3896143