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employment are such that new hires tend to take place only 
at the bottom levels of job ladders because of the need to 
maintain promotion schedules and training arrangements. The 
unemployed from the closed sector tend to have firm specific 
skills and experiences that are less employable in other 
firms. Thus as the chances for recall diminishes, the rate 
of reemployment should also decrease. 
The negative time dependence in closed employment sectors 
may be argued to be eventually changed by a shift into the 
open employment sector and search in a competitive labor 
market. The prediction then should be that the positive time 
dependency eventually becomes positive as the rate of 
reemployment also becomes dependent on individual charac¬ 
teristics. 
It is hypothesized that there are sources of both positive 
and negative true time dependency that should be 
identifiable by labor market structures. However, there 
will also be unmeasured heterogeneity that would show up as 
negative time dependency regardless of the labor market 
structure the individual is exposed to. The predicted 
differences therefore may only show up as more or less 
negative time dependency. 
These hypotheses are tested below using data on employment 
spells from the Panel Study of Income Dynamics (PSID)° In 
the present analysis no direct measures of labor market 
structures are introduced. Such measures relying on occupa¬ 
tional and industry variables are being constructed in 
current research. Here, I shall rely instead on the indi- 
vidual characteristics of race and labor force experience as 
indicators of labor market experience, assuming that blacks 
and inexperienced individuals are more likely to be located 
in the open employment sector. Similar information on 
whether or not the individual returned to the same employer