TY  - RPRT
        AU  - Rodríguez-Planas, Núria
        TI  - Re-Employment Bonuses in a Signalling Model of Temporary Layoffs
        PY  - 2004/Feb/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1010
        UR  - https://www.iza.org/publications/dp1010
        AB  - 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.

        KW  - temporary layoffs
KW  - signalling and re-employment bonus demonstrations
KW  - recall expectations
KW  - unemployment
        ER  -