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Federal Reserve Bank of Philadelphia
Working Papers
Recall and Unemployment
Shigeru Fujita
Giuseppe Moscarini
Abstract

We document in the Survey of Income and Program Participation covering 1990- 2013 that a surprisingly large share of workers return to their previous employer after a jobless spell and experience very different unemployment and employment outcomes than job switchers. The probability of recall is much less procyclical and volatile than the probability of finding a new employer. We add to a quantitative, and otherwise canonical, search-and-matching model of the labor market a recall option, which can be activated freely following aggregate and job-specific productivity shocks. Recall and search effort significantly amplify the cyclical volatility of new job-finding and separation probabilities.


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Shigeru Fujita & Giuseppe Moscarini, Recall and Unemployment, Federal Reserve Bank of Philadelphia, Working Papers 17-29, 29 Jun 2017.
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Keywords: Recall; unemployment; duration; matching function; business cycles
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