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Joblessness

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Abstract

The 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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  • Pedro Portugal & José A. F. Machado, 2010. "Joblessness," Working Papers w201033, Banco de Portugal, Economics and Research Department.
    • Handle: RePEc:ptu:wpaper:w201033
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    Cited by:

    1. 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, WZB Berlin Social Science Center.
    2. Milan Vodopivec, 2004. "Income Support for the Unemployed : Issues and Options," World Bank Publications - Books, The World Bank Group, number 14922, December.
    3. Reize, Frank, 2000. "Leaving unemployment for self-employment: a discrete duration analysis of determinants and stability of self-employment among former unemployed," ZEW Discussion Papers 00-26, ZEW - Leibniz Centre for European Economic Research.
    4. Vodopivec, Milan & Raju, Dhushyanth, 2002. "Income support systems for the unemployed : issues and options," Social Protection Discussion Papers and Notes 25529, The World Bank.

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