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Unemployment Duration in Germany – A comprehensive study with dynamic hazard models and P-Splines

Author

Listed:
  • Torben Kuhlenkasper

    (Hamburg Institute of International Economics (HWWI))

  • Max Friedrich Steinhardt

    (Hamburg Institute of International Economics (HWWI) Hamburg, Germany & Centro Studi Luca d‘Agliano, Italy)

Abstract

This paper makes use of data from the German socio-economic panel to gain new insights into the determinants of unemployment duration in Germany. Due to substantial differences with respect to labour market outcomes we follow a stratified approach with respect to gender and ethnicity. To analyze unemployment duration comprehensively, dynamic duration time models are used in which covariate e.ects are allowed to vary smoothly with unemployment duration and others enter the model in an a-priori unspecified functional form. We control for unobserved heterogeneity by following a modern frailty approach. As fitting routine we employ penalized spline smoothing effects using available software in R. We demonstrate with state-of-the-art regression models how effects of covariables change, either over duration time or within their domain and reveal substantial differences across gender and ethnicities for the German labour market. Among others we find large effects of family characteristics for women and a minor importance of formal qualifications for immigrants.

Suggested Citation

  • Torben Kuhlenkasper & Max Friedrich Steinhardt, 2011. "Unemployment Duration in Germany – A comprehensive study with dynamic hazard models and P-Splines," Norface Discussion Paper Series 2011018, Norface Research Programme on Migration, Department of Economics, University College London.
    • Handle: RePEc:nor:wpaper:2011018
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    References listed on IDEAS

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    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.
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    3. Steinhardt Max Friedrich, 2011. "The Wage Impact of Immigration in Germany - New Evidence for Skill Groups and Occupations," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-35, June.
    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. Kauermann, Goran & Khomski, Pavel, 2006. "Additive two-way hazards model with varying coefficients," Computational Statistics & Data Analysis, Elsevier, vol. 51(3), pages 1944-1956, December.
    6. Göran Kauermann & Jean D. Opsomer, 2011. "Data-driven selection of the spline dimension in penalized spline regression," Biometrika, Biometrika Trust, vol. 98(1), pages 225-230.
    7. Viktor Steiner, 2001. "Unemployment Persistence in the West German Labour Market: Negative Duration Dependence or Sorting?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(1), pages 91-113, February.
    8. Kauermann, Goran, 2005. "Penalized spline smoothing in multivariable survival models with varying coefficients," Computational Statistics & Data Analysis, Elsevier, vol. 49(1), pages 169-186, April.
    9. Kaas Leo & Manger Christian, 2012. "Ethnic Discrimination in Germany’s Labour Market: A Field Experiment," German Economic Review, De Gruyter, vol. 13(1), pages 1-20, February.
    10. Olympia Bover & Manuel Arellano & Samuel Bentolila, 2002. "Unemployment Duration, Benefit Duration and the Business Cycle," Economic Journal, Royal Economic Society, vol. 112(479), pages 223-265, April.
    11. Kuhlenkasper, Torben & Kauermann, Göran, 2010. "Duration of maternity leave in Germany: A case study of nonparametric hazard models and penalized splines," Labour Economics, Elsevier, vol. 17(3), pages 466-473, June.
    12. Daniel Aaronson & Bhashkar Mazumder & Shani Schechter, 2010. "What is behind the rise in long-term unemployment?," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 34(Q II), pages 28-51.
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    Cited by:

    1. Ieva Brauksa & Ludmila Fadejeva, 2013. "Internal Labour Market Mobility in 2005-2011: The Case of Latvia," Working Papers 2013/02, Latvijas Banka.
    2. Hohenleitner, Ingrid & Hillmann, Katja, 2012. "Impact of Benefit Sanctions on Unemployment Outflow - Evidence from German Survey Data," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 66055, Verein für Socialpolitik / German Economic Association.
    3. Falavigna Falavigna & Elena Ragazzi & Lisa Sella, "undated". "Vocational training and labour market: inclusion or segregation paths? An integrated approach on immigrant trainees in Piedmont," CERIS Working Paper 201425, CNR-IRCrES Research Institute on Sustainable Economic Growth - Torino (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY.
    4. Feridoon Koohi-Kamali & Aida Farmand & Jose Pedro Bastos Neves, 2021. "The Duration of U.S. Joblessness and the Great Recession," SCEPA working paper series. 2021-03, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    5. Ludmila Fadejeva & Ieva Opmane, 2016. "Internal labour market mobility in 2005–2014 in Latvia: the micro data approach," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 16(2), pages 152-174.

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    More about this item

    Keywords

    Unemployment; Duration Time Models; Dynamic Effets; Penalized Splines; German Socio-Economic Panel; Ethnic Labour Market Segmentation;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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