Strategic Firm Behavior and Worker Outcomes under Advance Notice Regulations

This study examines how mandatory advance notice requirements for mass layoff events affect both worker outcomes and firm behavior. Using quasi-experimental variation in notice requirements and comprehensive Canadian administrative data, we investigate whether longer mandatory notice periods improve post-displacement outcomes for workers, while also analyzing how firms strategically respond to these requirements. Our preliminary evidence suggests firms manipulate layoff sizes to avoid longer notice periods, potentially undermining the policy’s effectiveness. This research will measure the marginal effect of advanced notice for workers’ employment outcomes, and describe drawbacks associated with existing threshold-type legislation.