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Unemployment Dynamics and Duration Dependence

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  • van den Berg, Gerard J
  • van Ours, Jan C

Abstract

A major issue in the analysis of unemployment durations concerns distinguishing genuine duration dependence of the exit rate out of unemployment from unobserved heterogeneity. The authors present a method for the nonparametric estimation of both phenomena, designed to be applicable to time-series data on aggregate outflows from different duration classes. The model explicitly takes into account that individual exit rates are affected by the business cycle and by seasonal effects. The method is applied to U.S. data. The authors find diverging duration effects among black and white individuals. However, except for white males, duration dependence is dominated by unobserved heterogeneity. Copyright 1996 by University of Chicago Press.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 14 (1996)
Issue (Month): 1 (January)
Pages: 100-125

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Handle: RePEc:ucp:jlabec:v:14:y:1996:i:1:p:100-125

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References

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  1. Berg, G.J. van den, 1987. "Nonstationarity in job search theory," Research Memorandum 242, Tilburg University, Faculty of Economics and Business Administration.
  2. Bruce D. Meyer, 1991. "Unemployment Insurance And Unemployment Spells," NBER Working Papers 2546, National Bureau of Economic Research, Inc.
  3. Christopher J. Flinn & James J. Heckman, 1982. "Are Unemployment and Out of the Labor Force Behaviorally Distinct Labor Force States?," NBER Working Papers 0979, National Bureau of Economic Research, Inc.
  4. Elbers, Chris & Ridder, Geert, 1982. "True and Spurious Duration Dependence: The Identifiability of the Proportional Hazard Model," Review of Economic Studies, Wiley Blackwell, vol. 49(3), pages 403-09, July.
  5. Butler, Richard J & McDonald, James B, 1986. "Trends in Unemployment Duration Data," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 545-57, November.
  6. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
  7. Abowd, John M & Zellner, Arnold, 1985. "Estimating Gross Labor-Force Flows," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(3), pages 254-83, June.
  8. Ours, J.C. van, 1992. "Duration Dependency and Unobserved Heterogeneity in Unemployment Time Series," Open Access publications from Tilburg University urn:nbn:nl:ui:12-142180, Tilburg University.
  9. repec:fth:inseep:9216 is not listed on IDEAS
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