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Unequal Chances on a Flexible Labor Market, The Case of the Netherlands

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  • Govert E. Bijwaard

    ()
    (Erasmus University Rotterdam)

  • Justus Veenman

    ()
    (Erasmus University Rotterdam)

Abstract

Labor markets in Western countries are becoming more and more flexible, thereby meeting the needs of employers. Yet the new flexibility also offers opportunities to workers, while at the same time bears the risk of long-term exclusion. This paper deals with unequal chances on the contemporary Dutch labor market, in particular for workers with unfavorable human capital characteristics. As such we have chosen workers from the four largest immigrant groups: Turks, Moroccans, Surinamese and Antilleans. The data used are from the SPVA, the survey 'Social Position and Use of Public Utilities by Migrants' for the years 1998 and 2002. These are based on stock sampling. Since for some individuals labor market transitions occur at a very low rate, these individuals may stay in the current state till they reach the retirement age of 65. We estimate hazard rate models that account for both the stock-sampling and the possible maximum duration for the transitions from unemployment, household care and disability to employment. Then we decompose the differences in expected duration between the immigrant groups and the Dutch natives into the contribution of differences in observable characteristics, coefficient estimates and baseline hazard parameters. The main results of the analyses are that unequal chances exist, but to a different degree for the various groups and with variations per transition type. Labor market experience seems to protect from long-term exclusion.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 08-005/4.

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Date of creation: 17 Jan 2008
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Handle: RePEc:dgr:uvatin:20080005

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Keywords: Flexible labor market; duration; Oaxaca-Blinder decomposition;

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  1. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  2. Govert Bijwaard & Geert Ridder, 1998. "Correcting for Selective Compliance in a Re-employment Bonus Experiment," Tinbergen Institute Discussion Papers 98-096/4, Tinbergen Institute.
  3. Ham, John C & Svejnar, Jan & Terrell, Katherine, 1998. "Unemployment and the Social Safety Net during Transitions to a Market Economy: Evidence from the Czech and Slovak Republics," American Economic Review, American Economic Association, vol. 88(5), pages 1117-42, December.
  4. Murphy, Anthony, 1996. "A piecewise-constant hazard-rate model for the duration of unemployment in single-interview samples of the stock of unemployed," Economics Letters, Elsevier, vol. 51(2), pages 177-183, May.
  5. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  6. Heckman, James J. & Singer, Burton, 1984. "Econometric duration analysis," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 63-132.
  7. Nickell, Stephen J, 1979. "Estimating the Probability of Leaving Unemployment," Econometrica, Econometric Society, vol. 47(5), pages 1249-66, September.
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