Layoff Rates Research Articles

Canadian Jobs and Firm Size: Do Smaller Firms Pay Less?

Even after controlling for observable workers' characteristics and for occupation and industry-specific effects, a substantial wage differential remains between large and small firms. What underlies the remaining wage differential is unclear. Direct evidence on pension plan coverage and on lay-off rates by firm size is inconsistent with the bad working conditions hypothesis. The union avoidance hypothesis does not seem to explain an important portion o f the wage differential. As suggested by efficiency wage models, part of the remaining wage differential may be due to firms' heterogeneity. Similarly, perhaps large firms pay higher wages simply (partly) beca use they employ workers with more unobserved abilities. Because differen t explanations of the wage differential may lead to different policy implications, determining the source of the wage-firm size effect is an important question for future research.

The Unemployment Insurance Payroll Tax and Interindustry and Interfirm Subsidies

Unemployment insurance (UI) in the U.S. is financed through a payroll tax that is imperfectly experience rated, and thus only partially reflects a firm's use of the system. As a result, certain firms and industries receive many more dollars in unemployment benefits than they pay in taxes. We document that the same patterns of large interindustry subsidies have persisted for over 30 years, and we find that these subsidies are due mostly to differences in layoff rates across industries. Agriculture, mining, manufacturing, and particularly construction receive subsidies, while trade, finance, insurance and real estate, and services consistently pay more in taxes than they receive. Additionally, using previously unexamined firm level data, we document a persistent pattern of interfirm subsidies across several years. Together, these results indicate that UI benefit payments are predictable, thus weakening arguments for incomplete experience rating that focus on its insurance value to firms faced with large layoff costs. We also find that the efficiency costs of the cross-subsidies to less stable industries may be large, but such calculations depend on differences between marginal and average subsidies that are difficult to estimate.

Insiders and outsiders in wage formation: The dutch case

In this paper the relevance of the insider-outsider theory is investigated for the Netherlands. Estimation results of a macro wage equation show that the insider-outsider distinction has some empirical relevance, because the lay-off rate has a significant negative influence on wages. However, the extreme insider-outsider model is rejected, because wages are also found to be significantly negatively related to the rate of long-term unemployment.

JOB SECURITY and JOB SEARCH IN MORE THAN ONE LABOR MARKET

I analyze job search behavior of unemployed workers who may search for work in several sectors of the economy. Although reservation wages are equal in each sector, workers search more intensively in sectors with lower layoff rates. Thus workers more quickly find and accept jobs with more security.

Australian Evidence on the Exit/Voice Model of the Labor Market

Two predictions of the exit/voice model of union activity that have been confirmed by empirical research in the United States are that union workers will have longer tenures and lower quit rates than nonunion workers. This study replicates the methods used in one important U.S. investigation of these “voice” effects to explore whether the same effects are apparent in Australia. The authors' analysis of data on young men from the 1985 Australian Longitudinal Survey yields support for both predictions. Two differences between the Australian and U.S. results are that the union effect on job tenure is considerably larger in Australia than in the United States, and unionism significantly reduces layoff rates in Australia, whereas it has been found to have no significant effect on layoffs in the United States.

Low-Back Injuries in a Heavy Industry II

Trends in rates of low-back strains, low-back impact injuries, and non-low-back injuries among field employees of a petroleum drilling company, 1979-1985, were examined to investigate the relationship between economic factors and the incidence of low-back and other injuries. Economic indicators included the rate of resignations, a surrogate for turnover, and the rate of layoffs. Only lost-time low-back strain rates increased during times of worker layoffs. Non-low-back injury rates were highest during periods of high turnover and no layoffs. Although the increasing age of the work force and the anxiety generated by an industry-wide depression may have played a role, it is likely that the increase in lost-time low-back strain injuries was a worker response to possible layoff.

New Evidence on Unions and Layoff Rates

This study uses data from the 1980 EOPP establishment survey to test the hypothesis that unionization leads to higher layoff rates. Previous studies, using industry-level data for manufacturing, have found that a firm with 100% of its workers unionized would lay off more than twice as many employees as an otherwise identical nonunionized firm. The results presented here show the unionization effect to be, at most, less than one-fifth as large as that found using industry data. In fact, the author finds that in manufacturing (though not in nonmanufacturing) it is not clear whether unionized establishments lay off more workers than nonunionized establishments because they are unionized or because they tend to be large.

New Evidence on Unions and Layoff Rates

New Evidence on Unions and Layoff Rates

When public sector workers unionize

In the 1980s, public sector unionism has become the most vibrant component of the American labor movement. What does this new look of organized labor mean for the economy? Do labor-management relations in the public sector mirror patterns in the private, or do they introduce a novel paradigm onto the labor scene? What can the private sector learn from the success of collective bargaining in the public? Contributors to When Public Sector Workers Unionize which was developed from the NBER's program on labor studies examine these and other questions using newly collected data on public sector labor laws, labor relations practices of state and local governments, and labor market outcomes. Topics considered include the role, effect, and evolution of public sector labor law and the effects that public sector bargaining has on both wage and nonwage issues. Several themes emerge from the studies in this volume. Most important, public sector labor law has a strong and pervasive effect on bargaining and on wage and employment outcomes in public sector labor markets. Also, public sector unionism affects the economy in ways that are different from, and in many cases opposite to, the ways private sector unionism does, appearing to stimulate rather than reduce employment, reducing rather than increasing layoff rates, and developing innovate ways to settle labor disputes such as compulsory interest arbitration instead of strikes and lockouts found in the private sector.

Search, Layoffs, and Reservation Wages

I analyze job search models with random layoffs in which employment opportunities are characterized by a wage and some measure of risk. Intuition suggests that a worker ought to demand a higher wage if he is to accept a job with a higher layoff rate; but this is not true in several models analyzed in the literature. I demonstrate here that assumptions about what happens immediately after a layoff and after a quit are critical in determining the relation between reservation wages and risk. Making these assumptions explicit clarifies the reasons why different models imply quite different predictions.

Unemployment Insurance Taxes and Cyclical Layoff Incentives

When unemployment insurance (UI) taxes are incompletely experience rated, a self-financing UI system has to impose additional taxes that are exogenous to the behavior of individual firms. In the United States, these nonrated tax components vary predictably over the business cycle. A model of firm behavior under such a tax is presented. Evidence suggests signs for the parameters of the model that predict that incomplete experience rating, while (as shown elsewhere) increasing the rate of temporary layoffs, leads to the use of multiple tax schedules in a way that exerts downward pressure on cyclical swings in aggregate unemployment.

Layoffs and unemployment insurance

This paper presents econometric evidence of a causal relationship between the frequency of layoffs and the structure of the unemployment insurance system. The data are pooled time-series and cross-sectional observations on layoffs, UI benefits, UI taxes and wages. Annual dummy variables and industry mix variables are included to adjust for pooling. Weighted two-stage least squares is used to adjust for aggregation and for reverse casuality. The empirical results confirm the expectations of the theoretical models and indicate that UI has a substantial effect on layoff rates.

CAUSES AND CONSEQUENCES OF LAYOFFS

Using probit analysis, this article finds that differential treatment accounts for a substantial portion of the higher layoff rates of blacks in comparison to whites. However, women are found to be considerably less prone to layoffs than men with similar characteristics. Among those who obtained subsequent employment (taking into account the possible selectivity bias in such a subsample), white males are hurt more by layoffs than black males in terms of both short-term and long-term earnings growth; women's earnings are not necessarily affected by layoff at all. However, whites and males are found to be more likely to be reemployed than blacks and females, respectively.

The Impact of Differences in Turnover Rates on Male/Female Pay Differentials

Economic theory suggests that wages vary with turnover rates. Because of hiring and training costs, workers viewed as likely to quit can anticipate a wage discount. Workers in industries with high layoff rates may demand a compensating wage premium. By pooling time-series industry turnover rates, by sex, with 1970 Census data, we are able to examine the effect of past industry turnover on current earnings. Turnover proves to be important for both males and females, although the wage discount for a high quit probability is larger for females. When differences in turnover are taken into account, the portion of the male/female earnings gap explainable by human capital and socioeconomic variables increases by a factor of one-half.

The Cyclical Pattern of Temporary Layoffs in United States Manufacturing

ONE important question arises out of current attempts to provide a foundation for aggregate wage rigidity and unemployment. How mobile are unemployed workers? Recent theoretical models of unemployment can be divided into two basic categories: the new microeconomic search theories attribute unemployment to the job search and job changing behavior of workers who become permanently separated from their jobs. The newer contract theories attribute unemployment to the periodic employment reductions (via temporary layoffs) that are necessary to accommodate demand fluctuations when workers remain indefinitely attached to specific firms. The relative importance of these two approaches in explaining cyclical unemployment hinges on the share of unemployment over the business cycles that is associated with real labor turnover. Unfortunately no data are currently collected on the fraction of unemployment with or without job change. This paper derives estimates of temporary layoff unemployment for U.S. manufacturing from Bureau of Labor Statistics (BLS) establishment turnover data. After a brief discussion of current unemployment data, a time dependent distributed lag model of manufacturing rehires is developed. The model allows estimation of both the percentage of each month's layoffs that end in rehire and the average duration of unemployment before rehire. Together with the layoff rate, these two statistics determine an estimate of manufacturing unemployment without job change.

Specific Human Capital: An Application to Quit Rates and Layoff Rates

This study develops the concept of firm-specific human capital which results from training, search, and transfer investments of peculiar value to a particular firm. The effects of firm-specific human capital on firm turnover and wage policies are examined. The optimal sharing of such investments between firm and worker is explored. The important propositions that layoff rates and quit rates are negatively related to the firm's and worker's investments, respectively, in specific capital are tested using cross-section data for a broad set of manufacturing industries. The results support the hypotheses and reconcile past, apparently contradictory, empirical efforts along these lines.

A Time Series Analysis of Layoff Rates

This study attempts to shed some light on labor market behavior by examining layoff rates. Multiple regressions are employed to estimate layoff rate functions for 20 manufacturing industries using quarterly data. Some industries are found to postpone layoffs in the face of falling demand by at least a quarter period. Many industries apparently adjust their layoff rates to take account of the probability of rehiring their own employees. This behavior is likely to be associated with the degree of specific training that employees have. It represents a potential impediment to countercyclical policy measures.

Behind the Markets

RETURN TO ISSUEPREVNewsNEXTBehind the MarketsEmployment changes are taking place very slowly in chemical manufacturing . . . Layoff rate at year-end was only seven workers per 1,000 . . . Wages are highest in Charleston, Detroit, BuffaloHARRY STENERSONCite this: Chem. Eng. News 1949, 27, 10, 718Publication Date (Print):March 7, 1949Publication History Published online5 November 2010Published inissue 7 March 1949https://doi.org/10.1021/cen-v027n010.p718Copyright © 1949 AMERICAN CHEMICAL SOCIETYArticle Views4Altmetric-Citations-LEARN ABOUT THESE METRICSArticle Views are the COUNTER-compliant sum of full text article downloads since November 2008 (both PDF and HTML) across all institutions and individuals. These metrics are regularly updated to reflect usage leading up to the last few days.Citations are the number of other articles citing this article, calculated by Crossref and updated daily. Find more information about Crossref citation counts.The Altmetric Attention Score is a quantitative measure of the attention that a research article has received online. Clicking on the donut icon will load a page at altmetric.com with additional details about the score and the social media presence for the given article. Find more information on the Altmetric Attention Score and how the score is calculated. Share Add toView InAdd Full Text with ReferenceAdd Description ExportRISCitationCitation and abstractCitation and referencesMore Options Share onFacebookTwitterWechatLinked InReddit PDF (105 KB) SUBJECTS:Industrial manufacturing,Manufacturing,Materials processing,Mathematical methods Get e-Alerts