This paper studies the cyclical behavior of employment duration using data from the National Longitudinal Survey of Youth 1979 cohort. We estimate a proportional hazard model with competing risks, distinguishing diﬀerent types of separations. A higher unemployment rate at the start of an employment relationship increases the probability that the worker quits to take or look for another job, but it decreases the probability that the ﬁrm ﬁres the worker. The net eﬀect of these opposing forces on the overall duration of the employment is negative, but small, implying that match quality is weakly pro-cyclical. We also build a simple job-ladder model to interpret our empirical results.
Business cycles, employment, quits, ﬁring, match quality, job duration
Labor Economics | Labor Relations
BAYDUR, Ismail and MUKOYAMA, Toshihiko.
Employment duration and match quality over the business cycle. (2015). 1-30. Research Collection School Of Economics.
Available at: http://ink.library.smu.edu.sg/soe_research/2034
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