Stigma effects of layoffs?: Evidence from German micro-data

Based on a signaling model of Gibbons and Katz (1991; Journal of Labor Economics 9, 351–380) this paper compares the development of the wages of dismissed employees to those who lost their job because of plant closings. In contrast to the US and Canada there is no evidence for a stigma effect of layoffs in Germany. Some explanations of the divergent results are pointed out.