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Estimating the Probability of Leaving Unemployment Using Uncompleted Spells from Repeated Cross-section Data

Author

Listed:
  • Maia Guell

    (Universitat Pompeu Fabra and CEP (LSE), CEPR and IZA)

  • Luojia Hu

    (Northwestern University)

Abstract

We propose a new econometric estimation method for analyzing the probability of leaving unemployment using uncompleted spells from repeated cross-section data, which can be especially useful when panel data are not available. The proposed method-of-moments-based estimator has two important features: (1) it estimates the exit probability at the individual level and (2) it does not rely on the stationarity assumption of the inflow composition. We illustrate and gauge the performance of the proposed estimator using the Spanish Labor Force Survey data, and analyze the changes in distribution of unemployment between the 1980s and 1990s during a period of labor market reform. We find that the relative probability of leaving unemployment of the short-term unemployed versus the long-term unemployed becomes significantly higher in the 1990s.

Suggested Citation

  • Maia Guell & Luojia Hu, 2003. "Estimating the Probability of Leaving Unemployment Using Uncompleted Spells from Repeated Cross-section Data," Working Papers 854, Princeton University, Department of Economics, Industrial Relations Section..
    • Handle: RePEc:pri:indrel:475
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    More about this item

    Keywords

    repeated cross-section data; GMM; duration analysis; unemployment;
    All these keywords.

    JEL classification:

    • P40 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - General
    • P41 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Planning, Coordination, and Reform

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