MANDATORY NOTICE

Firms' incentives to inform workers about their future viability are analyzed using a two-period signaling model. I find that, if wages can be set after firms learn their viability, they will perfectly signal firms' closure plans. Mandatory-notice laws, if they have any effect at all, reduce worker utility and raise profits because they obviate the need for "permanent" firms to signal via higher wages. If a noncontingent wage must be set before any private information arrives, pooling occurs in the absence of legislation, and mandatory-notice laws can be Pareto improving.