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

Todd Idson () and Robert Valletta

Journal of Labor Economics, 1996, vol. 14, issue 4, 654-76

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.

Date: 1996
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