Advance Notice and Unemployment: New Evidence from the 1988 Displaced Worker Survey

Abstract

This paper examines how advance notice of layoff affects the incidence and duration of unemployment following displacement. The authors use the Displaced Worker Survey for 1988, which, unlike earlier surveys in the series, contains information on written notice. The results are mixed. Longer written notice may more than double the proportion of white-collar workers who move directly to new employment. But written notice has no such positive effects for blue-collar workers, regardless of its length. Informal (unwritten) notice benefits male workers, either by improving their chances of avoiding unemployment (white-collar men) or by reducing the average spell of unemployment (blue-collar men).