Working Paper

Advance Layoff Notices and Labor Market Forecasting


Abstract: We collect rich establishment-level data about advance layoff notices filed under the Worker Adjustment and Retraining Notification (WARN) Act since January 1990. We present in-sample evidence that the number of workers affected by WARN notices leads state-level initial unemployment insurance claims, changes in the unemployment rate, and changes in private employment. The effects are strongest at the one and two-month horizons. After aggregating state-level information to a national-level “WARN factor” using a dynamic factor model, we find that the factor substantially improves out-of-sample forecasts of changes of manufacturing employment in real time.

Keywords: initial UI claims.; mass layoffs; employment; unemployment; plant closings; WARN act;

JEL Classification: E27; J65; K31;

https://doi.org/10.26509/frbc-wp-202003

Access Documents

File(s): https://doi.org/10.26509/frbc-wp-202003
Description: Full Text

Authors

Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Working Papers

Publication Date: 2020-01-31

Number: 202003

Pages: 39