Full text: Applications of event history analysis in life course research

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UNEMPLOYMENT DURATIONS IN CLOSED AND OPEN EMPLOYMENT 
The typical unemployment spell in open employment systems is 
produced by a voluntary quit for search. In closed 
employment systems, the spell should result from a temporary 
layoff. In open systems, the spell is ended by the 
acceptance of a wage offer that matches the reservation wage 
chosen by the individual. In closed systems the spell in 
ended by the recall. This simple scenario, of course, 
assumes several things. First, that quits from open employ- 
ment and layoff from closed employment are the only modes of 
job separation. Second, that people during unemployment 
spells do not move from one sector to another. 
There is a third mode of job separation in both systems: 
dismissal. Theoretically, such separations should be 
frequent in open employment. They should be the exception 
by definition in closed employment. Empirically they are 
rare. The standard CPS question about this suggests that 
only a very small proportion of those unemployed have been 
dismissed. This may, of course, reflect response bias 
resulting from reluctance to admit having been fired. It 
also may result from the unemployment spell being very short 
after dismissal. They presumably are caused by a 
discrepancy between a person's performance and the current 
wage rate. Reemployment opportunities are more ample the 
lower the wage rate. If the spells are very short they are 
under represented in cross-sectional counts of spells, 
because of length bias (Salant, 1977), caused by the 
selectivity of spells sampled by the cross-sectional survey 
(Sørensen, 1977b). In longitudinal data, such as those 
employed here, spells caused by dismissals may be more 
adequately represented. However, whether they originate in 
open or closed employment, they should result in search.
	        
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