AbstractThe U.S. labor market has been experiencing unprecedented high average unemployment duration. The shift in the unemployment duration distribution can be traced back to the early nineties. In this paper, censored quantile regression methods are employed to analyze the changes in the US unemployment duration distribution. We explore the decomposition method proposed by Machado and Mata (2005) to disentangle the contribution of compositional vis-à-vis structural changes. The data used in this inquiry are taken from the nationally representative Displaced Worker Surveys of 1988 and 2008. Apart from the effect of economic improvement we find that the sensitivity of joblessness duration to education and the aging of the population were the two main forces behind the increase of the unemployment duration, in the last twenty years. We tentatively argue that firms use education as a signaling device during recessions, but the signaling power of education during the recent low-unemployment environment faded significantly.
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Bibliographic InfoPaper provided by Banco de Portugal, Economics and Research Department in its series Working Papers with number w201033.
Date of creation: 2010
Date of revision:
Find related papers by JEL classification:
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-16 (All new papers)
- NEP-LAB-2011-01-16 (Labour Economics)
- NEP-LTV-2011-01-16 (Unemployment, Inequality & Poverty)
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- Schömann, Klaus & Flechtner, Stefanie & Mytzek, Ralf & Schömann, Isabelle, 2000. "Moving towards employment insurance: unemployment insurance and employment protection in the OECD," Discussion Papers, Research Unit: Labor Market Policy and Employment FS I 00-201, Social Science Research Center Berlin (WZB).
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- Vodopivec, Milan & Raju, Dhushyanth, 2002. "Income support systems for the unemployed : issues and options," Social Protection Discussion Papers 25529, The World Bank.
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