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 School of Economics and Finance, Queensland University of Technology in its series School of Economics and Finance Discussion Papers and Working Papers Series with number 087a.
Date of creation: 15 Jun 2000
Date of revision:
Other versions of this item:
- Paul Frijters, 2000. "Persistencies in the Labor Market," Econometric Society World Congress 2000 Contributed Papers 1303, Econometric Society.
- Frijters, Paul & Lindeboom, Maarten & van den Berg, Gerard J., 2009. "Persistencies in the Labour Market," IZA Discussion Papers 4025, Institute for the Study of Labor (IZA).
- 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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