FEMALE LABOR SUPPLY FOLLOWING DISPLACEMENT - A SPLIT-POPULATION MODELOF LABOR-FORCE PARTICIPATION AND JOB SEARCH

Following permanent layoffs most women search for new jobs, but some w ithdraw from the labor force. We develop a joint model of the choice t o undertake postdisplacement job search and unemployment durations for searchers and estimate it, using data from the 1988 Displace Worker S urvey. Maximum likelihood estimates of this ''split-population'' model show that labor force withdrawal is an important factor explaining th e distribution of postdisplacement jobless spells. The model also allo ws us to distinguish the effect of any covariate on the decision to en gage in postdisplacement search from its effect on search duration. Si ngle-population models obscure this distinction.