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State Dependence in Unemployment Incidence: Evidence for British Men Revisited


  • Arulampalam, Wiji

    () (University of Warwick)


The issues of persistence in the observed labour market status of men are investigated using the British Household Panel Survey for the period 1991-97. The paper extends previous work in many directions. In particular, problems of endogenous initial conditions, and unobserved heterogeneity, are addressed within the context of different definitions of unemployment. In addition, allowance is also made to accommodate the ‘stayer’ phenomenon in the state of employment. All these were found to be very important in the estimation of the effect of scarring.

Suggested Citation

  • Arulampalam, Wiji, 2002. "State Dependence in Unemployment Incidence: Evidence for British Men Revisited," IZA Discussion Papers 630, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp630

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    References listed on IDEAS

    1. Arulampalam, W., 1998. "A Note on Estimated Coefficients in Random Effects Probit Models," The Warwick Economics Research Paper Series (TWERPS) 520, University of Warwick, Department of Economics.
    2. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-659, May.
    3. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics,in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
    4. Arulampalam, Wiji, 2001. "Is Unemployment Really Scarring? Effects of Unemployment Experiences on Wages," Economic Journal, Royal Economic Society, vol. 111(475), pages 585-606, November.
    5. Arulampalam, Wiji & Booth, Alison L & Taylor, Mark P, 2000. "Unemployment Persistence," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 24-50, January.
    6. Flaig, Gebhard & Licht, Georg & Steiner, Viktor, 1993. "Testing for state dependence effects in a dynamic model of male unemployment behaviour," ZEW Discussion Papers 93-07, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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    Cited by:

    1. Paul Frijters & Maarten Lindeboom & Gerard van den Berg, 2000. "Persistencies in the Labour Market," School of Economics and Finance Discussion Papers and Working Papers Series 087a, School of Economics and Finance, Queensland University of Technology.
    2. Gartell, Marie, 2009. "Unemployment and subsequent earnings for Swedish college graduates: a study of scarring effects," Working Paper Series 2009:10, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    3. Amynah Gangji & Robert Plasman, 2008. "Microeconomic analysis of unemployment persistence in Belgium," International Journal of Manpower, Emerald Group Publishing, vol. 29(3), pages 280-298, June.
    4. Nordström Skans, Oskar, 2004. "Scarring effects of the first labour market experience: A sibling based analysis," Working Paper Series 2004:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    5. Mark P. Taylor, 2007. "Tied Migration and Subsequent Employment: Evidence from Couples in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(6), pages 795-818, December.
    6. Verho, Jouko, 2017. "Economic crises and unemployment persistence: Analysis of job losses during the Finnish 1990s recession," Working Papers 99, VATT Institute for Economic Research.

    More about this item


    state dependence; unemployment; dynamic binary panel models; unobserved heterogeneity; initial conditions;

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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