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Unemployment duration and the role of compositional variation: evidence from a period of economic crisis in Finland

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  • Jouko Verho

Abstract

The recession of the early 1990s caused a serious unemployment problem in Finland. This study investigates the role of compositional variation in unemployment duration using individual data on Finnish workers. The compositional effect is examined by predicting the impact of the observed unemployment inflow heterogeneity on aggregate re-employment rates. Focusing on a recession period provides useful variation for the analysis due to large increase in the unemployment inflow. According to the results, the aggregate outflow effect dominates and the observed compositional variation implies only a small increasing trend in the average duration during the recession period. Copyright Springer-Verlag Berlin Heidelberg 2014

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  • Jouko Verho, 2014. "Unemployment duration and the role of compositional variation: evidence from a period of economic crisis in Finland," Empirical Economics, Springer, vol. 47(1), pages 35-56, August.
    • Handle: RePEc:spr:empeco:v:47:y:2014:i:1:p:35-56
    DOI: 10.1007/s00181-013-0732-3
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    11. Hélène Turon, 2003. "Inflow Composition, Duration Dependence and their Impact on the Unemployment Outflow Rate," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(1), pages 31-47, February.
    12. Muriel Dejemeppe, 2005. "A Complete Decomposition of Unemployment Dynamics using Longitudinal Grouped Duration Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(1), pages 47-70, February.
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    Cited by:

    1. Amparo Nagore García & Arthur van Soest, 2017. "New job matches and their stability before and during the crisis," International Journal of Manpower, Emerald Group Publishing Limited, vol. 38(7), pages 975-995, October.
    2. Nagore Garcia, Amparo, 2015. "Essays on employment and unemployment transitions," Other publications TiSEM ba0cb100-38a2-4964-bdcd-9, Tilburg University, School of Economics and Management.
    3. Amparo Nagore García & Arthur Soest, 2017. "Unemployment Exits Before and During the Crisis," LABOUR, CEIS, vol. 31(4), pages 337-368, December.
    4. Amparo Nagore García, 2017. "Gender Differences in Unemployment Dynamics and Initial Wages over the Business Cycle," Journal of Labor Research, Springer, vol. 38(2), pages 228-260, June.
    5. NAGORE GARCIA Amparo, 2017. "Gender Differences in Unemployment Dynamics and Initial Wages over the Business Cycle," LISER Working Paper Series 2017-06, Luxembourg Institute of Socio-Economic Research (LISER).

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    More about this item

    Keywords

    Unemployment duration; Unemployment composition; Business cycles; E32; J64;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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