CMStatistics 2021: Start Registration
View Submission - CFE
Title: Advance layoff notices and aggregate job loss Authors:  Kurt Lunsford - Federal Reserve Bank of Cleveland (United States) [presenting]
Abstract: Establishment-level data are collected from advance layoff notices filed under the Worker Adjustment and Retraining Notification (WARN) Act since January 1990. First, we aggregate this data into a monthly, state-level, unbalanced panel and show that WARN layoffs lead state-level initial unemployment insurance (UI) claims, changes in the unemployment rate, and changes in private employment. Next, we use a dynamic factor model to aggregate the unbalanced state-level panel into a national WARN layoff index. This index moves closely with layoffs from Mass Layoff Statistics and the Job Openings and Labor Turnover Survey, but is timelier and covers a longer sample. Using a VAR, we show that an increase in the WARN layoff index generates increases in initial UI claims, and the job separation and unemployment rates. Finally, we show that the WARN layoff index improves pseudo-real-time forecasts of the unemployment rate.