Mandatory Notice and the Jobless Durations of Displaced Workers

Abstract

Using Canadian Displaced Workers Survey data for 1981–86, the author studies the effect of Canadian advance notice laws on displaced workers' jobless durations. By considering statutory notice requirements, rather than actual notice provision, the author is able to avoid the problems associated with the endogeneity of notice that have characterized previous studies of this question. So-called group notice laws, which apply to large-scale layoffs, reduced the jobless durations of plant closure victims, but individual notice laws, which apply to all layoffs in some jurisdictions but only small-scale layoffs in others, had little effect. One possible explanation for this difference is that workers who lose their jobs while their plant remains open may have stronger expectations of being rehired than do other displaced workers, and may therefore delay job search with or without notice.