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Determinants of Unemployment Duration in Russia

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  • Mark C. Foley
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    Abstract

    Using information contained in a nationally representative, longitudinal survey of Russian citizens, this research analyzes the determinants of unemployment duration during the early stages of economic transition. A competing-risks, discrete-time waiting model, augmented to incorporate unobserved heterogeneity, is employed to analyze whether there is evidence of duration dependence in unemployment, and the role of demographic characteristics, alternative income support, and local demand conditions in explaining unemployment duration for working-age individuals. Married women are found to experience significantly longer unemployment spells before exiting to a job compared to married men. Older individuals can expect to be unemployed longer than comparable younger workers. Persons with higher education do not have significantly longer unemployment spells than those with secondary or even primary education. Having children has no effect on the duration of unemployment, however they do appear to motivate women to drop out of the labor force, significantly decreasing the time spent searching for work. Local labor market demand conditions have a significant effect on duration. Individuals in regions with higher unemployment rates, all else equal, have longer unemployment spells. With respect to the reason for the entering unemployment, persons laid off from their last job have shorter durations relative to quitters. Finally, there is evidence of duration dependence in the re-employment hazard in Russia, with a period of positive duration dependence in the first 7 months, followed by a declining hazard until approximately eighteen months. These results are robust to the introduction of unobserved heterogeneity.

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    File URL: http://www.econ.yale.edu/growth_pdf/cdp779.pdf
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    Bibliographic Info

    Paper provided by Economic Growth Center, Yale University in its series Working Papers with number 779.

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    Length: 39 pages
    Date of creation: Aug 1997
    Date of revision:
    Handle: RePEc:egc:wpaper:779

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    Related research

    Keywords: Unemployment Duration; Economic Transition; Russia;

    References

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    1. 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.
    2. Lawrence F. Katz & Bruce D. Meyer, 1990. "The Impact of the Potential Duration of Unemployment Benefits on the Duration of Unemployment," NBER Working Papers 2741, National Bureau of Economic Research, Inc.
    3. Gary Solon, 1984. "Work Incentive Effects of Taxing Unemployment Benefits," NBER Working Papers 1260, National Bureau of Economic Research, Inc.
    4. Mortensen, Dale T, 1970. "Job Search, the Duration of Unemployment, and the Phillips Curve," American Economic Review, American Economic Association, vol. 60(5), pages 847-62, December.
    5. Hunt, Jennifer, 1995. "The Effect of Unemployment Compensation on Unemployment Duration in Germany," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 88-120, January.
    6. Foley, M.C., 1997. "Labor Market Dynamics in Russia," Papers 780, Yale - Economic Growth Center.
    7. Korpi, Tomas, 1995. "Effects of Manpower Policies on Duration Dependence in Re-employment Rates: The Example of Sweden," Economica, London School of Economics and Political Science, vol. 62(247), pages 353-71, August.
    8. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-79, June.
    9. Moffitt, Robert & Nicholson, Walter, 1982. "The Effect of Unemployment Insurance on Unemployment: The Case of Federal Supplemental Benefits," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 1-11, February.
    10. Lancaster, Tony, 1979. "Econometric Methods for the Duration of Unemployment," Econometrica, Econometric Society, vol. 47(4), pages 939-56, July.
    11. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-82, July.
    12. Mark C. Foley, 1997. "Labor Market Dynamics in Russia," Working Papers 780, Economic Growth Center, Yale University.
    13. John C. Ham & Samuel Rea, 1986. "Unemployment Insurance and Male Unemployment Duration in Canada," Working Papers 592, Princeton University, Department of Economics, Industrial Relations Section..
    14. Gregory, Paul R & Collier, Irwin L, Jr, 1988. "Unemployment in the Soviet Union: Evidence from the Soviet Interview Project," American Economic Review, American Economic Association, vol. 78(4), pages 613-32, September.
    15. Lippman, Steven A & McCall, John J, 1976. "The Economics of Job Search: A Survey," Economic Inquiry, Western Economic Association International, vol. 14(3), pages 347-68, September.
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    Citations

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    Cited by:
    1. Pieter Serneels, 2004. "The Nature of Unemployment in Urban Ethiopia," CSAE Working Paper Series 2004-01, Centre for the Study of African Economies, University of Oxford.
    2. Louise Grogan & Gerard J. van den Berg, 1999. "The Duration of Unemployment in Russia," Tinbergen Institute Discussion Papers 99-011/3, Tinbergen Institute.
    3. Furmanov, Kirill & Chernysheva, Irina, 2012. "Health and job search in Russia," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 26(2), pages 62-91.
    4. Voicu, Alexandru, 2002. "Employment Dynamics in the Romanian Labor Market: A Markov Chain Monte Carlo Approach," IZA Discussion Papers 438, Institute for the Study of Labor (IZA).
    5. Pieter Serneels, 2002. "Explaining Non-Negative Duration Dependence Among the Unemployed," Economics Series Working Papers WPS/2002-13, University of Oxford, Department of Economics.
    6. Kupets, Olga, 2006. "Determinants of unemployment duration in Ukraine," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 228-247, June.
    7. Linz, Susan J. & Semykina, Anastasia, 2008. "How do workers fare during transition? Perceptions of job insecurity among Russian workers, 1995-2004," Labour Economics, Elsevier, vol. 15(3), pages 442-458, June.
    8. Tichit, Ariane, 2006. "The optimal speed of transition revisited," European Journal of Political Economy, Elsevier, vol. 22(2), pages 349-369, June.
    9. Pieter Serneels, 2008. "Unemployment duration, job search and labour market segmentation.� Evidence from urban Ethiopia," Economics Series Working Papers CSAE WPS/2008-17, University of Oxford, Department of Economics.
    10. Furmanov, Kirill, 2009. "On Measurement of the Average Unemployment Duration using Russian Longitudinal Monitoring Survey data," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 14(2), pages 74-99.

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