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Business Cycles and Compositional Variation in U.S. Unemployment

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  • Abbring, J.H.
  • Berg, G. van den
  • Ours, J.C. van

    (Tilburg University, Center for Economic Research)

Abstract

In this paper we study U.S. unemployment dynamics using grouped unemployment data from the Current Population Survey over the period 1968-1992. We estimate a model that traces variation in these unemployment data, both over time and between demographic groups, back to the underlying variation in the inflow and the outflow. In turn, we model the outflow as a transition process in which we allow the exit probabilities to depend on calender time, duration, and demographic group. We particularly focus on the measurement and economic interpretation of the interaction of duration dependence of exit probabilities and the business cycle.

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1999-65.

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Date of creation: 1999
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Handle: RePEc:dgr:kubcen:199965

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Web page: http://center.uvt.nl

Related research

Keywords: unemployment incidence; unemployment duration; unemployment compositon; business cycles; sorting; ranking;

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  1. Carlson, John A & Horrigan, Michael W, 1983. "Measures of Unemployment Duration as Guides to Research and Policy: Comment [An Experience-Weighted Measure of Employment and Unemployment Duration]," American Economic Review, American Economic Association, vol. 73(5), pages 1143-50, December.
  2. Akerlof, George A & Main, Brian G M, 1980. "Unemployment Spells and Unemployment Experience," American Economic Review, American Economic Association, vol. 70(5), pages 885-93, December.
  3. Kim B. Clark & Lawrence H. Summers, 1979. "Labor Market Dynamics and Unemployemnt: A Reconsideration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 10(1), pages 13-72.
  4. Baker, Michael, 1992. "Unemployment Duration: Compositional Effects and Cyclical Variability," American Economic Review, American Economic Association, vol. 82(1), pages 313-21, March.
  5. Sider, Hal, 1985. "Unemployment Duration and Incidence: 1968-82," American Economic Review, American Economic Association, vol. 75(3), pages 461-72, June.
  6. Blanchard, O.J. & Diamond, P., 1990. "Ranking, Unemployment Duration, And Wages," Working papers 546, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. Baker, Michael, 1992. "Digit preference in CPS unemployment data," Economics Letters, Elsevier, vol. 39(1), pages 117-121, May.
  8. Michael R. Darby & John Haltiwanger & Mark Plant, 1984. "Unemployment-Rate Dynamics and Persistent Unemployment Under RAtional Expectations," UCLA Economics Working Papers 339, UCLA Department of Economics.
  9. 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.
  10. van den Berg, Gerard J & van Ours, Jan C, 1996. "Unemployment Dynamics and Duration Dependence," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 100-125, January.
  11. 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.
  12. Olivier Jean Blanchard, 1991. "Wage Bargaining and Unemployment Persistence," NBER Working Papers 3664, National Bureau of Economic Research, Inc.
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