Persistencies in the Labour Market
AbstractUsing longitudinal income-tax registers, we study how past labour market outcomes affect current labour market transition rates. We focus on hysteresis effects of the durations and incidence of previous spells out of work. We estimate flexible multi-state Mixed Proportional Hazard specifications for transition rates between employment, unemployment, and welfare/non-participation. Our main finding is that after longer periods of employment with high income, individuals' transition rates from unemployment to employment increase. Longer periods of non-employment generally decrease future transition rates to work, and sometimes also from work. The quantitative magnitude of persistency and hysteresis effects on inequality is modest.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4025.
Length: 43 pages
Date of creation: Feb 2009
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Other versions of this item:
- Paul Frijters, 2000. "Persistencies in the Labor Market," Econometric Society World Congress 2000 Contributed Papers 1303, Econometric Society.
- Paul Frijters & Maarten Lindeboom & Gerard van den Berg, 2000. "Persistencies in the Labour Market," School of Economics and Finance Discussion Papers and Working Papers Series 087a, School of Economics and Finance, Queensland University of Technology.
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
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