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Unemployment Duration Stigma and Re-employment Earnings

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  • Christian Belzil

Abstract

A nonstationary model of individual labor market histories, where the distribution of wages offers depends on elapsed unemployment duration and where unemployment compensation is claimed for a limited period only, is estimated from sample information on completed unemployment duration, accepted earnings, and accepted job duration, and can identify movements in the reservation wages induced by human capital loss from those caused by benefit exhaustion. The results indicate that individuals seem to be much more sensitive to benefit exhaustion than human capital loss. The estimated structural parameters provide an explanation for the existence of a statistical relationship between continuous unemployment and accepted job durations.

Suggested Citation

  • Christian Belzil, 1995. "Unemployment Duration Stigma and Re-employment Earnings," Canadian Journal of Economics, Canadian Economics Association, vol. 28(3), pages 568-585, August.
    • Handle: RePEc:cje:issued:v:28:y:1995:i:3:p:568-85
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    Citations

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    Cited by:

    1. Shuaizhang Feng & Lars Lefgren & Brennan C. Platt & Bingyong Zheng, 2019. "Job search under asymmetric information: endogenous wage dispersion and unemployment stigma," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 67(4), pages 817-851, June.
    2. Amuedo-Dorantes, Catalina & Serrano-Padial, Ricardo, 2007. "Wage Growth Implications of Fixed-Term Employment: An Analysis by Contract Duration and Job Mobility," Labour Economics, Elsevier, vol. 14(5), pages 829-847, October.
    3. Luigi Aldieri, 2009. "The Effects of Unemployment Experiences on Subsequent Wages in Italy," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 52(2), pages 109-119.
    4. Bemjamin Villena-Roldan, 2009. "Aggregate Implications of Employer Search and Recruiting Selection," 2009 Meeting Papers 97, Society for Economic Dynamics.
    5. Mattia Filomena, 2021. "Unemployment Scarring Effects: A Symposium On Empirical Literature," Working Papers 453, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    6. Paul Gregg & Emma Tominey, 2004. "The Wage Scar from Youth Unemployment," The Centre for Market and Public Organisation 04/097, The Centre for Market and Public Organisation, University of Bristol, UK.
    7. Kuhlenkasper, Torben & Kauermann, Göran, 2010. "Female wage profiles: An additive mixed model approach to employment breaks due to childcare," HWWI Research Papers 2-18, Hamburg Institute of International Economics (HWWI).
    8. repec:ebl:ecbull:v:10:y:2002:i:2:p:1-8 is not listed on IDEAS
    9. Zafar Nazarov, 2010. "The Effect of the UI Wage Replacement Rate on Reemployment Wages A Dynamic Discrete Time Hazard Model with Unobserved Heterogeneity," Working Papers WR-734, RAND Corporation.

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