Abstract

In this paper we argue that temporary layoffs and recalls reveal important information on firms’ expectations of business development and workers’ expectations concerning employment opportunities and wages. We exploit a match of linked employer employee data and unemployment records from Austria, which contain information on temporary layoffs and expected recall dates. We study the type of firms that use temporary layoffs and examine variation in the layoff size and the share of temporary layoffs on hiring patterns. On the workers’ side we examine how their own and their co-workers’ expected recall dates affect search outcomes.