A model of quits is constructed and combined with a labour demand function to produce a model of layoffs. These are combined to provide an explanation of separations. The main feature of this is the explicit incorporation of the interactions between quits and layoffs. A linear approximation and a structural form are estimated on UK manufacturing data for 1965-82. It is shown that the most important determinant of separations is the state of demand in the labour market, with some structural factors having a minor role to play.
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Burgess et al. (1990) studied this question.
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