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The Risk of marginalization in the Labour Market: Application of the Three State Dependent Competing Risks Duration Model

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  • Rosholm, M.

Abstract

In this paper I apply a three-state dependent competing risks model to analyse marginalization in the Danish labour market during the 1980s. I derive the theoretical contribution of a left-censored spell (which may also be right-censored), using a piecewise exponential baseline hazard specification. Dependency between risks and time spent in various states is allowed for. The main findings are that youth unemployment was a severe problem in the 1980s, caused mainly by high transition rates into nonparticipation and unemployment, rather than low transition rates into employment. Furthermore, for a certain cohort of men, 'The lost Generation', having obtained working experience is crucial to not being marginalized, that is, there are indications of a higher degree of polarization in the labour market for this particular male cohort.

Suggested Citation

  • Rosholm, M., 1997. "The Risk of marginalization in the Labour Market: Application of the Three State Dependent Competing Risks Duration Model," Papers 97-14, Centre for Labour Market and Social Research, Danmark-.
    • Handle: RePEc:fth:clmsre:97-14
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    Citations

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    Cited by:

    1. Schreiner, Ragnhild C., 2019. "Unemployed or Disabled? Disability Screening and Labor Market Outcomes of Youths," Memorandum 5/2019, Oslo University, Department of Economics.
    2. Raaum, Oddbjørn & Røed, Knut, 2003. "Do Business Cycle Conditions at the Time of Labour Market Entry Affect Future Unemployment?," Memorandum 12/2002, Oslo University, Department of Economics.
    3. Van den Berg, Gerard J., 2001. "Duration models: specification, identification and multiple durations," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 55, pages 3381-3460, Elsevier.
    4. Regan, Mark, 2020. "Wage scarring among unlucky European cohorts," Papers WP668, Economic and Social Research Institute (ESRI).
    5. Larsen, Birthe, 2001. "Minimum wages, technological progress and loss of skill," European Economic Review, Elsevier, vol. 45(8), pages 1521-1544, August.

    More about this item

    Keywords

    RISK ; UNEMPLOYMENT ; LABOUR MARKET;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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