The Mott effect describes the dissolution of bound states in a dense partially ionized plasma. It occurs when the ionization potential depression, owing to effects of correlation and degeneracy, compensates the binding energy of the bound state. At high densities and moderate temperatures, the Pauli blocking becomes important and influences significantly the degree of ionization in the region of degenerate plasmas. A quantum statistical approach is used where the total density is decomposed in an uncorrelated, “free” part and correlations, as a consequence of the cluster decomposition of the self‐energy. The contribution of correlations to the total density is given by bound states and continuum correlations. Exact solutions for a separable potential are compared to perturbation theory and numerical solutions of the in‐medium Schrödinger equation. The in‐medium scattering phase shifts are evaluated, and the role of continuum correlations is discussed. The Pauli blocking of bound states and the density of states are considered for warm dense matter conditions.