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Unemployment duration, job search and labour market segmentation Evidence from urban Ethiopia

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  • Pieter Serneels

Abstract

Although it is a common theoretical assumption that the chances to find a job fall with time in unemployment, this is not systematically confirmed by empirical evidence, and there is no evidence for developing countries. We develop a framework that allows us to test the four major explanations why we may observe non-negative duration dependence while genuine duration dependence is negative: financial support for the unemployed, active labour market policies, a change in the economy over time, and segmentation of the labour market into ‘good’ and ‘bad’ jobs. Using data for urban Ethiopia we observe a constant hazard while controlling for unobserved heterogeneity, and find that labour market segmentation is the only convincing explanation.

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Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2008-17.

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Date of creation: 2008
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Handle: RePEc:csa:wpaper:2008-17

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Keywords: unemployment; duration dependence; segmented labour markets; urban labour market 1;

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