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Is longer unemployment rewarded with longer job tenure?

Author

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  • Kohara, Miki
  • Sasaki, Masaru
  • Machikita, Tomohiro

Abstract

This paper examines whether or not a prolonged unemployment period can raise the quality of job matching after unemployment. We focus on job tenure as an indicator of a good quality job match after unemployment. We match two sets of Japanese administrative data compiled by the public employment security offices: one includes information about the circumstances of job seekers receiving unemployment insurance, and the other includes information about job seekers applying for jobs. We first show a negative relationship between unemployment duration and the subsequent job duration. Restricting the sample to job seekers who changed search behaviors in the final 59days before expiration of unemployment insurance, we secondly show an even greater negative effect of unemployment duration on the following job duration. The importance lies not only in the duration of unemployment. If job seekers keep a high reservation wage and a low search intensity because of the benefits of unemployment insurance, and change them in response to the expiration of insurance, prolonged unemployment will result in short job duration after unemployment.

Suggested Citation

  • Kohara, Miki & Sasaki, Masaru & Machikita, Tomohiro, 2013. "Is longer unemployment rewarded with longer job tenure?," Journal of the Japanese and International Economies, Elsevier, vol. 29(C), pages 44-56.
  • Handle: RePEc:eee:jjieco:v:29:y:2013:i:c:p:44-56
    DOI: 10.1016/j.jjie.2013.06.002
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    1. Kohara, Miki & Sasaki, Masaru & Machikita, Tomohiro, 2013. "Is longer unemployment rewarded with longer job tenure?," Journal of the Japanese and International Economies, Elsevier, vol. 29(C), pages 44-56.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Waiting for the perfect job does not work
      by Economic Logician in Economic Logic on 2011-04-04 19:03:00

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    1. Kohara, Miki & Sasaki, Masaru & Machikita, Tomohiro, 2013. "Is longer unemployment rewarded with longer job tenure?," Journal of the Japanese and International Economies, Elsevier, vol. 29(C), pages 44-56.

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    More about this item

    Keywords

    Unemployment duration; Unemployment insurance; Job search; Job stability; Administrative data; Japan;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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