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Seniority, Sectoral Decline, and Employee Retention: An Analysis of Layoff Unemployment Spells

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  • Idson, Todd L
  • Valletta, Robert G

Abstract

The authors investigate the effect of tenure on employee retention under varying labor market conditions. Using a competing risks analysis of recall and new job acceptance applied to layoff unemployment spell data from waves fifteen and sixteen (1982-83) of the Panel Study of Income Dynamics, they find that adverse conditions (sectoral employment decline) significantly reduce the positive tenure effect on recall probabilities. This result is consistent with firm default on delayed payment contracts and does not appear to reflect the effect of technological change on the value of firm-specific investments. Copyright 1996 by University of Chicago Press.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 14 (1996)
Issue (Month): 4 (October)
Pages: 654-76

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Handle: RePEc:ucp:jlabec:v:14:y:1996:i:4:p:654-76

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Web page: http://www.journals.uchicago.edu/JOLE/

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Cited by:
  1. Bayo-Moriones, Alberto & Galdón Sánchez, José Enrique & Güell, Maia, 2004. "Is Seniority-Based Pay Used as a Motivation Device? Evidence from Plant Level Data," CEPR Discussion Papers 4606, C.E.P.R. Discussion Papers.
  2. Francois, P. & Roberts, J., 2001. "Contracting Productivity Growth," Discussion Paper 2001-35, Tilburg University, Center for Economic Research.
  3. Robert G. Valletta, 1998. "Declining job security," Working Papers in Applied Economic Theory 98-02, Federal Reserve Bank of San Francisco.
  4. Bruce Fallick & Keunkwan Ryu, 2003. "The Recall and New Job Search of Laid-off Workers: A Bivariate Proportional Hazard Model with Unobserved Heterogeneity," ISER Discussion Paper 0592, Institute of Social and Economic Research, Osaka University.
  5. Hallberg, Daniel, 2008. "Economic fluctuations and retirement of older employees," Working Paper Series 2008:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  6. Uwe Jirjahn & Jens Mohrenweiser & Uschi Backes-Gellner, 2010. "Works Councils and Learning: On the Dynamic Dimension of Codetermination," Research Papers in Economics 2010-06, University of Trier, Department of Economics.
  7. Chen, Ming-Yuan, 2002. "Survival duration of plants: Evidence from the US petroleum refining industry," International Journal of Industrial Organization, Elsevier, vol. 20(4), pages 517-555, April.
  8. Uwe Jirjahn, 2010. "Nonunion Worker Representation and the Closure of Establishments: German Evidence on the Role of Moderating Factors," Research Papers in Economics 2010-01, University of Trier, Department of Economics.

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