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Incidence and Duration of Unemployment Spells: Implications on the Wage Differentials of Part‐Time and Full‐Time Workers

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  • John Baffoe‐Bonnie

Abstract

This article analyzes the extent to which incidence of unemployment and duration of unemployment spells affect the wage differentials between full‐time and part‐time workers. The estimation results of a sample selectivity bias–adjusted wage equation reveal that high incidences of unemployment are associated with low wages for both full‐time and part‐time workers. However, the reduction in wages due to incidence of unemployment is larger for full‐time workers in high‐paid jobs than for their part‐time counterparts. Duration of unemployment spells affects full‐time and part‐time workers differently. In general, longer unemployment spells tend to increase the wages of full‐time workers but tend to depress the wages of part‐time workers. Although the probability of unemployment is not a factor in explaining the wage differential, the duration of unemployment accounts for a substantial portion (about 66.6% in full sample) of the wage differential that exists between full‐time and part‐time workers.

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  • John Baffoe‐Bonnie, 2003. "Incidence and Duration of Unemployment Spells: Implications on the Wage Differentials of Part‐Time and Full‐Time Workers," Contemporary Economic Policy, Western Economic Association International, vol. 21(2), pages 227-242, April.
    • Handle: RePEc:bla:coecpo:v:21:y:2003:i:2:p:227-242
    DOI: 10.1093/cep/byg007
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    References listed on IDEAS

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    1. Greene, Francis J. & Han, Liang & Martin, Sean & Zhang, Song & Wittert, Gary, 2014. "Testosterone is associated with self-employment among Australian men," Economics & Human Biology, Elsevier, vol. 13(C), pages 76-84.

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