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Explaining Unemployment Duration in Australia

  • NICK CARROLL

What influences the probability that someone will leave unemployment? Informed by a search-theoretic framework and allowing for exits to not in the labour force and employment, in this paper I examine what influences the probability that somebody will leave unemployment. The unemployment data used are derived from the retrospective work history information from the Household, Income and Labour Dynamics in Australia Survey. The results show that variables that increase wage offers and lower reservation wages are associated with shorter unemployment durations, and that exit rates from unemployment appear to remain steady initially with duration before declining relatively sharply. Copyright © 2006 The Economic Society of Australia.

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Article provided by The Economic Society of Australia in its journal Economic Record.

Volume (Year): 82 (2006)
Issue (Month): 258 (09)
Pages: 298-314

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Handle: RePEc:bla:ecorec:v:82:y:2006:i:258:p:298-314
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  1. Arulampalam, Wiji & Stewart, Mark B, 1995. "The Determinants of Individual Unemployment Durations in an Era of High Unemployment," Economic Journal, Royal Economic Society, vol. 105(429), pages 321-32, March.
  2. Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, vol. 81(1), pages 319-24, March.
  3. Nick Carroll, 2006. "Explaining Unemployment Duration in Australia," The Economic Record, The Economic Society of Australia, vol. 82(258), pages 298-314, 09.
  4. Böheim, René & Taylor, Mark P, 2000. "Unemployment Duration and Exit States in Britain," CEPR Discussion Papers 2500, C.E.P.R. Discussion Papers.
  5. Jeff Borland, 2000. "Disaggregated Models of Unemployment in Australia," Melbourne Institute Working Paper Series wp2000n16, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  6. Barrett, Garry F., 2000. "The effect of educational attainment on welfare dependence: Evidence from Canada," Journal of Public Economics, Elsevier, vol. 77(2), pages 209-232, August.
  7. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
  8. Brooks, Clive & Volker, Paul, 1986. "The Probability of Leaving Unemployment: The Influence of Duration, Destination and Demographics," The Economic Record, The Economic Society of Australia, vol. 62(178), pages 296-309, September.
  9. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  10. Arulampalam, Wiji & Booth, Alison L & Taylor, Mark P, 2000. "Unemployment Persistence," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 24-50, January.
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