A model of unemployment duration is estimated with weekly micro data on Canadian men. Ent itlement provisions in the unemployment insurance program and demand conditions are found to have a significant effect on the probability of leaving unemployment. The probability of a worker leaving unemploy ment declines with the duration of unemployment, holding unemployment insurance entitlement constant. When entitlement is allowed to vary, the probability of leaving first falls and then generally rises with unemployment duration. These results are robust with respect to allo wing for person-specific unobserved heterogeneity and alternative spe cifications of duration dependence. Copyright 1987 by University of Chicago Press.

A wage offer can be either acceptable or unacceptable to a worker, but in cross-sectional and panel data only acceptable wage offers are observed. An OLS wage equation will not reveal how job tenure affects wage offers but rather will reveal how tenure affects acceptable wage offers. By jointly modeling the firm's determination of the wage offer and the worker's decision to accept or reject the offer, we are able to estimate the effect of job tenure on wage offers consistently. In contrast to the usual OLS results, we find that job tenure has no statistically significant effect on wage offers.

Full-information maximum likelihood is used to estimate union wage, hours, and earnings markups. Construction union wage markups are positive (58.2% at the sample means). Since union hours markups are negative (-4.0%) for most demographic groups, union earnings markups (51.1%) are smaller than the wage markups. All exogenous variables are allowed to interact with the endogenous union dummy variable, which allows us to test whether markups vary across demographic groups, whether increased local unionization has a positive spillover effect in the nonunion sector, and whether increased local unemployment equally affects wages and hours in increased local unemployment equally affects wages and hours in the two sectors.