This result supports Proposition 2, which states that if the piece rate (b) is sufficiently high, layoffs are preferred to wage cuts.
The 6.3percentt was the highest layoff rate on record for long-tenured workers, slightly above the 6.2percentt in the 1981-1983 period.
British bosses, faced with higher layoff costs and wary of losing skilled staff as they did in previous recessions, decided to keep as many workers on as they could and take the hit instead to their bottom line.
[C5.] Loss Widens at Interpublic Group Interpublic Group of Companies reported a wider third-quarter loss, the biggest for any quarter in two years, on higher layoff costs, a quicker revamping, write-offs for troubled units and the potential settlement of litigation.
The other result, which shows that higher layoff costs reduce the probability of layoffs, is intuitive and needs no explanation.
For example, there may be wages differentials due to job risk, education, or occupations with higher layoff rates.
Second generation immigrants with vocational education, in particular males, face lower arrival rates when unemployed and higher layoff rates than those of their twins.
The crucial differences, as mentioned before, are a significantly lower offer arrival rate when unemployed and a much higher layoff rate (1.5 times higher) for second-generation non-Western males.
This tends to discredit the job volatility/unmeasured skill explanation of higher layoff rates of second-generation non-Western males, and points instead to the existence of other, possibly preference-based explanations i.e. discrimination.
