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Unemployment and Spell Duration during the Great Recession in the EU

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  • Carlos Gradín
  • Olga Cantó
  • Coral del Río

Abstract

The current economic recession has had unequal consequences on employment depending on the country considered. It is generally accepted that the negative impact of unemployment on individual welfare can be very different depending on its duration. However, conventional statistics on unemployment do not adequately capture to what extent the recession is not only increasing the incidence of unemployment but also its severity in terms of duration in time of ongoing unemployment spells. In this paper, we follow Shorrocks’s (2009a,b) proposal of a duration-sensitive measure of unemployment in order to analyze the different dynamic characteristics of unemployment in a selected group of European Union countries during the current Great Recession. Our results add some evidence on the relevance of incorporating the duration dimension in measuring unemployment and provide a tool for dynamic analysis based on cross-sectional data.

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Bibliographic Info

Paper provided by Universidade de Vigo, Departamento de Economía Aplicada in its series Working Papers with number 1205.

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Length: 26 pages
Date of creation: Sep 2012
Date of revision:
Handle: RePEc:vig:wpaper:1205

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Keywords: measurement of unemployment; spell duration; European Union;

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  1. Güell, Maia & Hu, Luojia, 2003. "Estimating the Probability of Leaving Unemployment Using Uncompleted Spells from Repeated Cross-Section Data," CEPR Discussion Papers 3957, C.E.P.R. Discussion Papers.
  2. Salant, Stephen W, 1977. "Search Theory and Duration Data: A Theory of Sorts," The Quarterly Journal of Economics, MIT Press, vol. 91(1), pages 39-57, February.
  3. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  4. Paul, Satya, 1991. "On the measurement of unemployment," Journal of Development Economics, Elsevier, vol. 36(2), pages 395-404, October.
  5. Martin Riese & K. Brunner, 1998. "Measuring the severity of unemployment," Journal of Economics, Springer, vol. 67(2), pages 167-180, June.
  6. Vani K . Borooah, 2002. "A Duration‐sensitive Measure of the Unemployment Rate: Theory and Application," LABOUR, CEIS, vol. 16(3), pages 453-468, 09.
  7. Hector Sala & José I. Silva & Manuel Toledo, 2012. "Flexibility at the Margin and Labor Market Volatility in OECD Countries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(3), pages 991-1017, 09.
  8. Cahuc, Pierre & Carcillo, Stéphane, 2011. "Is Short-time Work a Good Method to Keep Unemployment Down?," CEPR Discussion Papers 8214, C.E.P.R. Discussion Papers.
  9. Paul, Satya, 2001. "A Welfare Loss Measure of Unemployment with an Empirical Illustration," Manchester School, University of Manchester, vol. 69(2), pages 148-63, March.
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