%0 Report
        %A Rodríguez-Planas, Núria
        %T Re-Employment Bonuses in a Signalling Model of Temporary Layoffs
        %D 2004
        %8 2004 Feb
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 1010
        %U https://www.iza.org/publications/dp1010
        %X Temporary layoffs are an important feature of the United States labor market. If these
employer-employee relationships exist because of valuable job-matches, unemployment
among high-productivity laid-off workers may be optimal from societal perspective. However,
because of asymmetric information, low-productivity workers may behave strategically, and
choose unemployment instead of low-wage jobs, resulting in an inefficient level of
unemployment. This paper shows that in such cases, a re-employment bonus may give the
correct incentives to laid-off workers and achieve the optimal equilibrium. The paper analyzes
the equity properties of such a policy and its cost effectiveness. Finally, the model fits the
data and offers several policy implications.

        %K temporary layoffs
%K signalling and re-employment bonus demonstrations
%K recall expectations
%K unemployment