An Open Collector output is an NPN transistor. An NPN transistor allows the sinking of current to common. It can be thought of as a switch that allows the circuit, after the load, to be connected to common. This means that a source is required for the output to work. A supply through a load must be connected to the output, otherwise the NPN transistor is simply creating a path to common, i.e. a dry contact. Therefore, if you were to measure the voltage at the output of an open collector that is not hooked up to some supply you would not see a change in voltage. The voltage should be measured across the output load to determine if the open collector is working properly.

Learn more about encoder output types and how to select the best one for your application in the ENCODER 101: Selecting the Right Output industry whitepaper.