Recall – A way to mitigate adverse effects of unemployment on earnings across occupations?

Economic Analysis of Migrants and Natives on the German Labor Market : Microeconometric Evidence from German Administrative Data

“…In terms of occupations and industries, despite different definitions in the literature, my results largely coincide with findings of Böheim (2006) for Austria as well as of Edler et al (2019) and Liebig and Hense (2006) for Germany. Occupations and industries in the construction and agricultural sector use more often temporary layoffs and recall their workers after unemployment.…”

“…Figures of 30 percent or more are found by almost all international studies, such as for the U.S. (Katz andMeyer 1990), Spain (Alba-Ramírez et al 2007;Arranz and García-Serrano 2014), Austria (Böheim 2006;Weber 2015, 2020) or Sweden (Jansson 2002;Nivorozhkin 2008). For Germany, the corresponding figures are somewhat lower, ranging from 17 to 22 percent (Mavromaras and Rudolph 1995, 1997, 1998Liebig and Hense 2006;Edler et al 2019). Despite these high figures, the topic of temporary layoffs or recalls by previous employers is still often neglected when explaining unemployment dynamics, even though it is a popular instrument used by firms to reduce costs (Liebig and Hense 2006).…”

“…Since this approach is not desirable from a labor market policy perspective, some legal restrictions are intended to prevent or reduce temporary layoffs. However, empirical analyses provide evidence that about 20 percent of unemployed workers are still rehired by their previous firms in Germany (Edler et al 2019;Liebig and Hense 2006;Mavromaras and Rudolph 1995, 1997, 1998. One method, which is used by firms in order to conduct temporary layoffs and has not been considered in this context for Germany, is the use of temporary employment contracts.…”

“…This is explained by the absence of work councils in smaller firms, which rather reject this instrument (Mavromaras and Rudolph 1998). Further studies for Germany consider the gender wage discrimination linked to temporary layoffs (Mavromaras and Rudolph 1997), recalls associated with economic cycles (Liebig and Hense 2006) or recalls and differences in earnings (Edler et al 2019). These studies show that certain occupations and industries are particularly affected by temporary layoffs such as construction, but also hotels and restaurants and other industries affected by seasonal fluctuations.…”