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An Analysis of the Processes of Labour Market Exclusion and (Re-) Inclusion

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  • Rosholm, Michael

    ()
    (Aarhus University)

Abstract

In this paper we analyze the processes of labour market exclusion and (re-) inclusion, using a Danish register-based data set covering the period 1981-1990. The analysis is performed by estimation of reduced form transition models, the parameters of which are interpreted within the framework of search theory mixed with social psychological theories regarding unemployment and labour market exclusion. The main findings of the study are that low levels of education and working experience are associated with an increased risk of labour market exclusion. However, for the labour market (re-) inclusion process, human capital variables are not important. There is indirect evidence of psychological damaging and/or stigma effects of unemployment and nonparticipation. There is also evidence of budget constraints that eventually lead to decreasing reservation wages or increasing search intensity, as unemployment spells become very long. We discuss some policy implications of our findings.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 332.

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Length: 37 pages
Date of creation: Jul 2001
Date of revision:
Handle: RePEc:iza:izadps:dp332

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Related research

Keywords: Labour market exclusion and inclusion; multiple state duration model; left-censoring; unobserved heterogeneity;

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Cited by:
  1. Ana Flávia Machado & Rafael Perez Ribas, 2008. "Do Changes in the Labour Market Take Families out of Poverty? Determinants of Exiting Poverty in Brazilian Metropolitan Regions," Working Papers 44, International Policy Centre for Inclusive Growth.
  2. Agne Lauzadyte, 2007. "A Statistical Programme Assignment Model," Economics Working Papers 2007-18, School of Economics and Management, University of Aarhus.

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