Recall and Unemployment

Shigeru Fujita &
Giuseppe Moscarini

June 2017

WP 17-29 - The authors 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.

Supersedes Working Paper 14-3/R - Recall and Unemployment

The probability of recall is much less procyclical and volatile than the probability of finding a new employer. The authors 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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