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Separability of Duration Dependence and Unobserved Heterogeneity


  • Turon, Hélène

    () (University of Bristol)


Mixed proportional hazard models are commonly used to estimate duration dependence and unobserved heterogeneity in unemployment exit rates. Some strong assumptions are made in this framework, i.e. that the various influences on the individual unemployment exit rate are separable. The model we use in this paper allows for both the individual duration dependence pattern and the inflow composition to exhibit cyclical variations, thereby relaxing two of the three separability assumptions. The aim of this paper is to assess the validity of the third separability assumption, namely that the duration dependence pattern is the same for all individuals.

Suggested Citation

  • Turon, Hélène, 2003. "Separability of Duration Dependence and Unobserved Heterogeneity," IZA Discussion Papers 754, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp754

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    References listed on IDEAS

    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.
    2. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
    3. Olivier Jean Blanchard & Peter Diamond, 1994. "Ranking, Unemployment Duration, and Wages," Review of Economic Studies, Oxford University Press, vol. 61(3), pages 417-434.
    4. Machin, Stephen & Manning, Alan, 1999. "The causes and consequences of longterm unemployment in Europe," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 47, pages 3085-3139 Elsevier.
    5. Jackman, Richard & Layard, Richard, 1991. "Does Long-term Unemployment Reduce a Person's Chance of a Job? A Time-Series Test," Economica, London School of Economics and Political Science, vol. 58(229), pages 93-106, February.
    6. Abbring, Jaap H & van den Berg, Gerard J & van Ours, Jan C, 2001. "Business Cycles and Compositional Variation in U.S. Unemployment," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 436-448, October.
    7. Abbring, Jaap H. & van den Berg, Gerard J. & van Ours, Jan C., 2002. "The anatomy of unemployment dynamics," European Economic Review, Elsevier, vol. 46(10), pages 1785-1824, December.
    8. 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.
    9. Arulampalam, Wiji & Booth, Alison L & Taylor, Mark P, 2000. "Unemployment Persistence," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 24-50, January.
    10. Baker, Michael, 1992. "Unemployment Duration: Compositional Effects and Cyclical Variability," American Economic Review, American Economic Association, vol. 82(1), pages 313-321, March.
    11. Kalwij, Adriaan, 2001. "Individuals' Unemployment Durations over the Business Cycle," IZA Discussion Papers 369, Institute for the Study of Labor (IZA).
    12. Ben Lockwood, 1991. "Information Externalities in the Labour Market and the Duration of Unemployment," Review of Economic Studies, Oxford University Press, vol. 58(4), pages 733-753.
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    Cited by:

    1. Xavier Joutard & Luis A.I. Sagaon Teyssier, 2006. "Unemployment and employment dynamics in the Mexican segmented labour market," Working Papers halshs-00410460, HAL.

    More about this item


    unemployment outflow rate; regional and age group data; mixed proportional hazard;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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