Length of Service Terminations And the Nature of the Employment Relationship

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Length of Service Terminations And the Nature of the Employment Relationship
Katharine G Abraham
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In actual fact, firm-specific layoff rates for workers with different amounts of seniority would be exceedingly difficult to obtain. Longitudinal micro data sets like the National Longitudinal Survey (NLS) and the Panel Study of Income Dynamics (PSID) are possible sources of information on permanent layoff rates. There are at least two serious problems with using these data for the purpose at hand, in addition to that discussed above. First, the unit of observation is the individual, not the fi
...rm. To see how this might cause problems, suppose that union sector layoffs typically occurred at sites with mostly long-service employees but that nonunion sector layoffs typically occurred at sites with mostly recently-hired employees. In this situation, even if senior union employees at any given site are relatively less likely to be laid off than would be true without a union, the aggregate data might show less decline in the layoff rate with length of service in the union sector than in the nonunion sector.

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