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Job search and the duration of layoff unemployment

Pissarides, Christopher (1982) Job search and the duration of layoff unemployment. Quarterly Journal of Economics, 97 (4). pp. 595-612. ISSN 0033-5533

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This paper derives an optimal job-searching strategy for workers on layoff, and an optimal recall policy for firms, when each side anticipates the other side's actions correctly. It shows that workers search for an alternative job only if the probability of recall falls below a critical level, and that firms may recall before the recovery of demand, depending on the costs of laying off and hiring workers, and the probability of losing workers on layoff. Through the use of optimal job searching and recall policies, the paper derives expressions for the duration of layoff unemployment and discusses briefly their comparative-static properties.

Item Type: Article
Official URL:
Additional Information: © 1982 The President and Fellows of Harvard College and the Massachusetts Institute of Technology
Library of Congress subject classification: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System: J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J64 - Unemployment: Models, Duration, Incidence, and Job Search
Sets: Departments > Economics
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 27 Apr 2007

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