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Attrition and misclassification of drop-outs in the analysis of unemployment duration

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Abstract

Carling et al (1996) analyze a large data set of unemployed workers in order to examine, inter alia, the effect of unemployment benefits on the escape rate to employment. In this paper we take a closer look at the 20 per cent of workers who were drop-outs and check the empirical justification for modeling attrition as independent right censoring in the analysis of unemployment duration. It may very well be that dropping out, i.e. attrition, often occurs due to employment. In the analysis, we refer to these individuals as misclassified in that they are typically treated as if their unemployment spell went beyond the time of attrition. We propose to follow up the drop-outs by a supplementary sample and apply a Multiple Imputation approach to incorporate the supplementary information. Our follow-up study revealed that 45% dropped out due to employment. The escape rate to employment was as a consequence under-estimated by 20 per cent, implying that the effect of unemployment benefits on the escape rate is likely to be much greater than reported in Carling et al (1996)

Suggested Citation

  • Bring, Johan & Carling, Kenneth, 1998. "Attrition and misclassification of drop-outs in the analysis of unemployment duration," Working Paper Series 2001:3, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  • Handle: RePEc:hhs:ifauwp:2001_003
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    1. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
    2. Carling, Kenneth & Edin, Per-Anders & Harkman, Anders & Holmlund, Bertil, 1996. "Unemployment duration, unemployment benefits, and labor market programs in Sweden," Journal of Public Economics, Elsevier, vol. 59(3), pages 313-334, March.
    3. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-679, June.
    4. Hausman, Jerry A & Wise, David A, 1979. "Attrition Bias in Experimental and Panel Data: The Gary Income Maintenance Experiment," Econometrica, Econometric Society, vol. 47(2), pages 455-473, March.
    5. Lancaster, Tony, 1979. "Econometric Methods for the Duration of Unemployment," Econometrica, Econometric Society, vol. 47(4), pages 939-956, July.
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    Cited by:

    1. Carling, Kenneth & Gustafson, Lena, 1999. "Self-employment grants vs. subsidized employment: Is there a difference in the re-unemployment risk?," Working Paper Series 1999:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.

    More about this item

    Keywords

    Follow-up study; Informative censoring; Multiple imputation; Register data; Survival models;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods

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