Layoffs and Duration Dependence in a Model of Turnover
Journal of Econometrics, Vol. 28, pp. 51-69, 1985
Posted: 17 Sep 2009
Date Written: September 16, 2009
A semi-Markov model of turnover, resulting from optimizing behavior on the part of workers, is developed. Duration dependence in the transition out of employment is modelled as resulting from a layoff probability which decreases with tenure. Some preliminary results, based on DIME data, are presented. These indicate that a declining hazard rate in the transition out of employment is a significant feature of the data.
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