Finance and Economics Discussion Series (FEDS)
The Timing of Mass Layoff Episodes: Evidence from U.S. Microdata
This paper studies employment decisions at U.S. companies over the 2007â€“2012 period, during and after the Great Recession. To this end, I build a panel dataset that matches publicly-listed companies' financial reports to their announced layoff episodes. Using limited dependent variable regressions, I find that layoffs respond to accumulated changes in a company's financial conditions. While recent financial changes have the largest impacts on layoff propensities, financial changes over at least four previous quarters appear to have additional marginal effects.
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Keywords: Downsizing, Employment adjustment costs
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