Skip to:
  1. Main navigation
  2. Main content
  3. Footer
Working Paper

Advance Layoff Notices and Labor Market Forecasting

We collect rich establishment-level data about advance layoff notices filed under the Worker Adjustment and Retraining Notification (WARN) Act since January 1990. We present in-sample evidence that the number of workers affected by WARN notices leads state-level initial unemployment insurance claims, changes in the unemployment rate, and changes in private employment. The effects are strongest at the one and two-month horizons. After aggregating state-level information to a national-level “WARN factor” using a dynamic factor model, we find that the factor substantially improves out-of-sample forecasts of changes of manufacturing employment in real time.

Working Papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded official Federal Reserve Bank of Cleveland publications. The views expressed in this paper are those of the authors and do not represent the views of the Federal Reserve Bank of Cleveland or the Federal Reserve System.


Suggested Citation

Krolikowski, Pawel M., and Kurt G. Lunsford. 2020. “Advance Layoff Notices and Labor Market Forecasting.” Federal Reserve Bank of Cleveland, Working Paper No. 20-03. https://doi.org/10.26509/frbc-wp-202003