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Unemployment and spell duration during the Great Recession in the EU

Author

Listed:
  • Carlos Gradín
  • Olga Cantó
  • Coral del Río

Abstract

Purpose - – The purpose of this paper is to analyze the different dynamic characteristics of unemployment in a selected group of European Union countries during the current Great Recession, which had unequal consequences on employment depending on the country considered. Design/methodology/approach - – The paper follows Shorrocks’s proposal of a duration-sensitive measure of unemployment, and uses cross-sectional data reported by Eurostat coming from European Labour Force Surveys. Findings - – The results add some evidence on the relevance of incorporating spells’ duration in measuring unemployment, finding remarkable differences in unemployment patterns in time among European countries. Research limitations/implications - – In this paper unemployment is analyzed for all the labor force. Future research should investigate patterns across specific groups such as young people, women, immigrants or the low skilled. Practical implications - – It is generally accepted that the negative impact of unemployment on individual welfare can be very different depending on its duration. However, conventional statistics on unemployment do not adequately capture to what extent the recession is not only increasing the incidence of unemployment but also its severity in terms of duration in time of ongoing unemployment spells. The paper shows an easy and practical way to do it in order to improve the understanding of the unemployment phenomenon, using information usually reported by statistical offices. Originality/value - – First, the paper provides a tool for dynamic analysis of unemployment based on reported cross-sectional data. Second, the paper demonstrates the empirical relevance of considering spells’ duration when assessing differences in unemployment across countries or in unemployment trends. This is usually neglected or only partially addressed by most conventional measures of unemployment.

Suggested Citation

  • Carlos Gradín & Olga Cantó & Coral del Río, 2015. "Unemployment and spell duration during the Great Recession in the EU," International Journal of Manpower, Emerald Group Publishing, vol. 36(2), pages 216-235, May.
  • Handle: RePEc:eme:ijmpps:v:36:y:2015:i:2:p:216-235
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    References listed on IDEAS

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    1. Martin Riese & K. Brunner, 1998. "Measuring the severity of unemployment," Journal of Economics, Springer, vol. 67(2), pages 167-180, June.
    2. Guell, Maia & Hu, Luojia, 2006. "Estimating the probability of leaving unemployment using uncompleted spells from repeated cross-section data," Journal of Econometrics, Elsevier, vol. 133(1), pages 307-341, July.
    3. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-659, May.
    4. Paul, Satya, 1991. "On the measurement of unemployment," Journal of Development Economics, Elsevier, vol. 36(2), pages 395-404, October.
    5. Hector Sala & José I. Silva & Manuel Toledo, 2012. "Flexibility at the Margin and Labor Market Volatility in OECD Countries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(3), pages 991-1017, September.
    6. Paul, Satya, 2001. "A Welfare Loss Measure of Unemployment with an Empirical Illustration," Manchester School, University of Manchester, vol. 69(2), pages 148-163, March.
    7. Cahuc, Pierre & Carcillo, Stéphane, 2011. "Is Short-time Work a Good Method to Keep Unemployment Down?," CEPR Discussion Papers 8214, C.E.P.R. Discussion Papers.
    8. Vani K . Borooah, 2002. "A Duration‐sensitive Measure of the Unemployment Rate: Theory and Application," LABOUR, CEIS, vol. 16(3), pages 453-468, September.
    9. Stephen W. Salant, 1977. "Search Theory and Duration Data: A Theory of Sorts," The Quarterly Journal of Economics, Oxford University Press, vol. 91(1), pages 39-57.
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    Citations

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    Cited by:

    1. Camp, Kevin & Waldorf, Brigitte, 2014. "The impact of spatial flexibility on unemployment duration in young college-educated workers," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170678, Agricultural and Applied Economics Association.
    2. Olivier Goudet & Jean-Daniel Kant & Gérard Ballot, 2016. "WorkSim: A Calibrated Agent-Based Model of the Labor Market Accounting for Workers' Stocks and Gross Flows," Post-Print hal-01510768, HAL.

    More about this item

    Keywords

    Europe; Unemployment; Recession; Data analysis;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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