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Anatomy of Non-Employment Risk

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  • Fugazza Carolina

    (Università degli Studi di Torino and CeRP-Collegio Carlo Alberto, ESOMAS, c.so Unione Sovietica 218 bisTorino, Italy)

Abstract

This paper investigates how job separation and job-finding probabilities shape the non-employment risk across ages and working group characteristics. Improving on current methods, I estimate duration models for employment and non-employment separately. I then use the results to derive the individual age profiles of conditional transitions in and out of non-employment as well as the unconditional non-employment risk profile over the whole working life. This approach allows me to apply the decomposition of changes in individual non-employment risk. To date, this type of decomposition has only been used to study aggregate non-employment dynamics. I find that differences in job separation rates across ages underlie the observed age differences in non-employment risk. When differences between working groups are under consideration, the job finding probability is just as important as the job separation probability.

Suggested Citation

  • Fugazza Carolina, 2019. "Anatomy of Non-Employment Risk," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(3), pages 1-19, July.
    • Handle: RePEc:bpj:bejeap:v:19:y:2019:i:3:p:19:n:4
    DOI: 10.1515/bejeap-2018-0070
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    References listed on IDEAS

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    More about this item

    Keywords

    non-employment risk; duration analysis; heterogeneity; semi-Markov processes;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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