In all OECD countries, Mandatory Notice (MN) policies require firms to inform workers in advance of layoff. Notification encourages workers to search for a new job while still employed. In theory, MN allows workers to avoid unemployment and find better jobs, increasing future production. The magnitude of this production gain depends on the relative effectiveness of search while employed versus unemployed. But on-the-job search and reduced work incentives decrease current production. Should the production losses outweigh future gains, Coasian bargaining predicts that firms offer severance instead of adhering to MN – thus enhancing the production efficiency of the policy. With Coasian bargaining, the efficiency loss of MN solely comes from delayed separation of unproductive job matches. We test these predictions using novel Swedish administrative data on layoff notifications. We first show that workers eligible for longer mandated notice are not only notified in advance, but also receive larger severance. As a result, they experience shorter non-employment spells and find better-paying jobs. By disentangling the overall effect of MN, we show that earlier notification leads workers to engage in fewer job search activities while still finding better-paying jobs without delay. Advance notice thus replaces job search while unemployed with more effective search while employed. We then gauge the production loss of MN by estimating the impact of notice on workers’ productivity and the magnitude of the loss due to delayed separations. In the final step, we evaluate the overall efficiency implications of MN by combining the empirical estimates of production gains and losses of MN using our theory. In our setting, the benefits of MN outweigh the costs.

How do caseworkers affect job finding and what characterizes a productive caseworker? To answer this question we exploit variation coming from the fact that many local employment offices in Sweden assign job seekers to caseworkers based on their date of birth. We couple this identification strategy with fine-grained administrative data on both caseworkers and job seekers. Estimation of caseworker fixed effects reveals sizable variation in overall caseworker value-added. Female caseworkers perform better than male caseworkers and caseworkers with two years of experience outperform caseworkers with less experience. Cognitive ability and personal experience of unemployment are not related to caseworker perfor mance. Based on the actions taken by the caseworkers we show that caseworker strategies are important. Analyses of caseworker–job seeker matching show that matching based on previous labor market experiences or gender leads to better outcomes.

Previous studies estimating the effect of generosity of unemployment insurance (UI) on unemployment duration has found that as job-seekers approach benefit exhaustion the probability of leaving unemployment increases sharply. Such ``spikes'' in the hazard rate has generally been interpreted as shirking among job-seekers timing their employment to coincide with benefit exhaustion. This, however, has been called into question by Card et al. (2007b) who claim that such spikes rather reflect flight out of the labor force as benefits run out. This paper revisits this debate by studying a 30 week UI benefit extension in Sweden and its effects on unemployment duration, duration on UI as well as the timing of employment. As the UI extension is predicated upon a job-seeker having a child below the age of 18 at the time of regular UI exhaustion this provides quasi-experimental variation which I exploit using a regression discontinuity design. I find that although increasing potential UI duration by 30 weeks increases actual take up by about 2.7 weeks, overall duration in unemployment and the probability of employment is largely unaffected. Moreover, I find no evidence of job-seekers manipulating the hazard to employment such that it coincides with UI benefit exhaustion.