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The Devil is in the Details: In and Out of Unemployment - Labour Market Dynamics and the Role of Testosterone

Author

Listed:
  • Peter Eibich

    (Max Planck Institute for Demographic Research)

  • Ricky Kanabar

    (Centre for Analysis of Social Policy and Centre for Death and Society, University of Bath)

  • Alexander Plum

    (NZ Work Research Institute, Faculty of Business, Economics and Law at AUT University)

  • Julian Schmied

    (Max Planck Institute for Demographic Research)

Abstract

Biological processes have provided new insights into diverging labour market trajectories. In this paper, we use population variation in testosterone levels to explain transition probabilities into and out of unemployment. We follow individual employment histories for 1,771 initially employed and 109 initially unemployed British men from the UK Household Longitudinal Study (“Understanding Society”) be-tween 2009 and 2015. To account for unobserved heterogeneity, we apply dynamic random effect models. We find that individuals with high testosterone levels are more likely to become unemployed, but they are also more likely to exit unemployment. Based on previous studies and descriptive evidence, we argue that these effects are likely driven by personality traits and occupational sorting of men with high testosterone levels. Our findings suggest that latent biological processes can affect job search behaviour and labour market outcomes, without necessarily relating to illness and disability.

Suggested Citation

  • Peter Eibich & Ricky Kanabar & Alexander Plum & Julian Schmied, 2020. "The Devil is in the Details: In and Out of Unemployment - Labour Market Dynamics and the Role of Testosterone," Working Papers 2020-13, Auckland University of Technology, Department of Economics.
  • Handle: RePEc:aut:wpaper:202013
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    References listed on IDEAS

    as
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    2. Jan Marcus, 2014. "Does Job Loss Make You Smoke and Gain Weight?," Economica, London School of Economics and Political Science, vol. 81(324), pages 626-648, October.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    labour market dynamics; unemployment; testosterone; random-effects probit;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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