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Duration dependence in the exit rate out of unemployment in Belgium. Is it true or spurious?

  • Muriel Dejemeppe

    (Fonds National de la Recherche Scientifique and Institut de Recherches Economiques et Sociales, Université catholique de Louvain, Belgium)

  • Bart Cockx

    (Département des Sciences Economiques and Institut de Recherches Economiques et Sociales, Université catholique de Louvain, Belgium)

On the basis of aggregate data for the early 1990s, we analyse the determinants of unemployment duration for laid-off male workers in Wallonia (Belgium). Our results indicate that if ranking in recruitment occurs, the standard mixed proportional hazard specification can be too restrictive, leading to an overstatement of the extent of true negative duration dependence. We conclude that negative duration dependence is largely spurious. We also decompose the time variation of the hazard in (unobserved) compositional and direct cyclical and seasonal effects. We find counter-cyclical variation in the quality of young workers, but none for the prime aged. Copyright © 2004 John Wiley & Sons, Ltd.

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Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 20 (2005)
Issue (Month): 1 ()
Pages: 1-23

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Handle: RePEc:jae:japmet:v:20:y:2005:i:1:p:1-23
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  12. Amemiya, Takeshi, 1981. "Qualitative Response Models: A Survey," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1483-1536, December.
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  17. Muriel Dejemeppe & Yves Saks, 2002. "A New Light into Regional Unemployment Disparities in Belgium : Longitudinal Analysis of Grouped Duration Data," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2002019, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  18. Lancaster, Tony, 1979. "Econometric Methods for the Duration of Unemployment," Econometrica, Econometric Society, vol. 47(4), pages 939-56, July.
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  24. Ridder, Geert, 1990. "The Non-parametric Identification of Generalized Accelerated Failure-Time Models," Review of Economic Studies, Wiley Blackwell, vol. 57(2), pages 167-81, April.
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