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Unemployment Dynamics and Duration Dependence

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  • van den Berg, Gerard J
  • van Ours, Jan C

Abstract

A major issue in the analysis of unemployment durations concerns distinguishing genuine duration dependence of the exit rate out of unemployment from unobserved heterogeneity. The authors present a method for the nonparametric estimation of both phenomena, designed to be applicable to time-series data on aggregate outflows from different duration classes. The model explicitly takes into account that individual exit rates are affected by the business cycle and by seasonal effects. The method is applied to U.S. data. The authors find diverging duration effects among black and white individuals. However, except for white males, duration dependence is dominated by unobserved heterogeneity. Copyright 1996 by University of Chicago Press.

Suggested Citation

  • van den Berg, Gerard J & van Ours, Jan C, 1996. "Unemployment Dynamics and Duration Dependence," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 100-125, January.
  • Handle: RePEc:ucp:jlabec:v:14:y:1996:i:1:p:100-125
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    1. 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.
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    8. Baker, Michael, 1992. "Unemployment Duration: Compositional Effects and Cyclical Variability," American Economic Review, American Economic Association, vol. 82(1), pages 313-321, March.
    9. van Ours, J. C., 1992. "Duration dependency and unobserved heterogeneity in unemployment time series (economics letters 38, no. 2, pp. 199-206)," Economics Letters, Elsevier, vol. 39(3), pages 375-375, July.
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    11. Ours, J. C. van, 1992. "Duration dependency and unobserved heterogeneity in unemployment time series : An empirical analysis for the Netherlands," Economics Letters, Elsevier, vol. 38(2), pages 199-206, February.
    12. Vishwanath, Tara, 1989. "Job Search, Stigma Effect, and Escape Rate from Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 487-502, October.
    13. Sider, Hal, 1985. "Unemployment Duration and Incidence: 1968-82," American Economic Review, American Economic Association, vol. 75(3), pages 461-472, June.
    14. N/A, 1986. "Statistical Appendix," National Institute Economic Review, National Institute of Economic and Social Research, vol. 115(1), pages 103-114, February.
    15. Chris Elbers & Geert Ridder, 1982. "True and Spurious Duration Dependence: The Identifiability of the Proportional Hazard Model," Review of Economic Studies, Oxford University Press, vol. 49(3), pages 403-409.
    16. van Ours, J.C., 1992. "Duration dependency and unobserved heterogeneity in unemployment time series," Other publications TiSEM ccc6516f-6bf2-4bae-86b4-c, Tilburg University, School of Economics and Management.
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