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Unemployment Persistence: Is There Evidence for Stigma Effects?

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Author Info
Biewen, Martin
Steffes, Susanne

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Abstract

We present evidence for a highly significant interaction between state dependence in individual unemployment risk and the business cycle. The disadvantage from having been unemployed in the previous period is smaller in times of relatively high unemployment and larger in times of low unemployment. This is consistent with the existence of stigma effects in the sense that unemployed individuals face difficulties finding a new job because employers interpret unemployment as a negative signal and do so especially when it is easier to find jobs, i.e. when unemployment is low. --

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Publisher Info
Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 08-057.

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Date of creation: 2008
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Handle: RePEc:zbw:zewdip:7380

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Related research
Keywords: Unemployment persistence; state dependence; human capital depreciation; stigma effects; scarring;

Find related papers by JEL classification:
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search

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This page was last updated on 2009-12-2.

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