Unemployment Duration

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Pedro Portugal - One of the best experts on this subject based on the ideXlab platform.

  • Unemployment Duration competing and defective risks
    Journal of Human Resources, 2003
    Co-Authors: John T Addison, Pedro Portugal
    Abstract:

    This paper examines the determinants of Unemployment Duration in a competing risks framework with two destination states: inactivity and employment. The innovation is the recognition of defective risks. A polynomial hazard function is used to differentiate between two possible sources of infinite Durations. The first is produced by a random process of unlucky draws, the second by workers rejecting a destination state. The evidence favors the mover-stayer model over the search model. Refinement of the former approach, using a more flexible baseline hazard function, produces a robust and more convincing explanation for positive and zero transition rates out of Unemployment.

  • Unemployment Duration competing and defective risks
    Social Science Research Network, 2001
    Co-Authors: Pedro Portugal, John T Addison
    Abstract:

    This paper examines the determinants of Unemployment Duration in a competing risks framework with two destination states, namely, inactivity and employment. The major innovation is our recognition of defective risks. We first use a polynomial hazard function to test for the presence of two-sources of defective risks: search involving a random process of unlucky draws that yields a non-proper Duration distribution; and a split-population model in which the decision by some individuals not to consider certain destination states produces a defective distribution. Having established the primacy of the latter model, we refine it using a more flexible piecewise-constant baseline hazard function. This specification broadly confirms our earlier findings but offers a more convincing explanation for positive and zero transition rates out of Unemployment. Although we do not reject the null of proportionality, abandoning the proportionality assumption does not materially alter our conclusions.

  • what hides behind an Unemployment rate comparing portuguese and u s labor markets
    The American Economic Review, 2001
    Co-Authors: Olivier J Blanchard, Pedro Portugal
    Abstract:

    Behind similar Unemployment rates in the United States and Portugal hide two very different labor markets. Unemployment Duration is three times longer in Portugal than in the United States. Symmetrically, flows of workers into Unemployment are three times lower in Portugal. These lower flows come in roughly equal proportions from lower job creation and destruction, and from lower worker flows given job creation and destruction. A plausible explanation is high employment protection in Portugal. High employment protection makes economies more sclerotic; but because it affects Unemployment Duration and worker flows in opposite directions, the effect on Unemployment is ambiguous.

  • Unemployment Duration competing and defective risks
    Research Papers in Economics, 2000
    Co-Authors: John T Addison, Pedro Portugal
    Abstract:

    This paper examines the determinants of Unemployment Duration in the framework of a competing risks model, where the destination states are employment and inactivity. The major innovation is the use of a split-population approach to accommodate the presence of defective risks in the context of the competing risks model. Certain of the regressors that affect the conditional hazards are allowed to influence defective risks. Unobserved individual heterogeneity among the susceptible populations is also controlled for. Access to Unemployment benefits and age are accorded special emphasis because of their influence on defective risks and escape rates.

  • what hides behind an umemployment rate comparing portuguese and u s Unemployment
    National Bureau of Economic Research, 1998
    Co-Authors: Pedro Portugal, Olivier J Blanchard
    Abstract:

    Over the last 15 years, Portugal and the United States have had the same average Unemployment rate, about 6.5%. But behind these similar rates hide two very different labor markets. Unemployment Duration in Portugal is more than three times that of the United States. Symmetrically, the flow of workers into Unemployment in Portugal is, in proportion to the labor force, less than a third of what it is in the United States. Relying on evidence from Portuguese and U.S. micro data sets, we show that these lower flows come in roughly equal proportions from lower job flows, and from lower worker flows relative to job flows. We then argue that these differences plausibly come from high employment protection in Portugal. We finally show how, looking across countries, higher employment protection is associated with lower flows and higher Unemployment Duration. In short, high employment protection makes economics more sclerotic; but because it affects Unemployment Duration and flows in opposite directions, it has an ambiguous effect on the Unemployment rate.

Konstantinos Tatsiramos - One of the best experts on this subject based on the ideXlab platform.

  • benefit Duration Unemployment Duration and job match quality a regression discontinuity approach
    Journal of Applied Econometrics, 2013
    Co-Authors: Marco Caliendo, Konstantinos Tatsiramos, Arne Uhlendorff
    Abstract:

    SUMMARY We use a sharp discontinuity in the maximum Duration of benefit entitlement to identify the effect of extended benefit Duration on Unemployment Duration and post-Unemployment outcomes (employment stability and re-employment wages). We address dynamic selection, which may arise even under an initially random assignment to treatment, estimating a bivariate discrete-time hazard model jointly with a wage equation and correlated unobservables. Owing to the non-stationarity of job search behavior, we find heterogeneous effects of extended benefit Duration on the re-employment hazard and on job match quality. Our results suggest that the unemployed who find a job close to and after benefit exhaustion experience less stable employment patterns and receive lower re-employment wages compared to their counterparts who receive extended benefits and exit Unemployment in the same period. These results are found to be significant for men but not for women. Copyright © 2012 John Wiley & Sons, Ltd.

  • benefit Duration Unemployment Duration and job match quality a regression discontinuity approach
    2009
    Co-Authors: Marco Caliendo, Konstantinos Tatsiramos, Arne Uhlendorff
    Abstract:

    The generosity of the Unemployment Insurance system (UI) plays a central role for the job search behavior of unemployed individuals. Standard search theory predicts that an increase in UI benefit generosity, either in terms of benefit Duration or entitlement, has a negative impact on the job search activities of the unemployed increasing their Unemployment Duration. Despite the disincentive effect of UI on Unemployment Duration, UI benefit generosity may also increase job match quality by allowing individuals to wait for better job offers. In this paper we use a sharp discontinuity in the maximum Duration of Unemployment benefits in Germany, which increases from 12 months to 18 months at the age of 45, to identify the effect of extended benefit Duration on Unemployment Duration and post-Unemployment outcomes. We find a spike in the re-employment hazard for the unemployed workers with 12 months benefit Duration, which occurs around benefit exhaustion. This leads to lower Unemployment Duration compared to their counterparts with 18 months benefit Duration. However, we also show that those unemployed who obtain jobs close to and after the time when benefits are exhausted are significantly more likely to exit subsequent employment and receive lower wages compared to their counterparts with extended benefit Duration.

  • Unemployment insurance in Europe: Unemployment Duration and subsequent employment stability
    Journal of the European Economic Association, 2009
    Co-Authors: Konstantinos Tatsiramos
    Abstract:

    The disincentive effect of Unemployment insurance on Unemployment Duration has been the focus of the empirical literature. The potential effect of Unemployment insurance on post-Unemployment outcomes, which may be regarded as beneficial by improving job matching, has attracted much less attention. This paper provides evidence on the effect of Unemployment benefits on Unemployment and employment Duration in Europe, using individual data from the European Community Household Panel for eight countries. Country specific estimates based on multivariate discrete-time Duration models, controlling for observed and unobserved individual heterogeneity, suggest that although receiving benefits has an adverse effect in the sense of increasing Unemployment Duration, there is also a positive effect by increasing subsequent employment Duration. This beneficial effect of Unemployment insurance on employment stability is pronounced in countries with relatively generous benefit systems, and for recipients who have remained unemployed for at least six months. These findings are in line with theories suggesting a matching effect of Unemployment insurance.

  • Unemployment insurance in europe Unemployment Duration and subsequent employment stability
    Research Papers in Economics, 2006
    Co-Authors: Konstantinos Tatsiramos
    Abstract:

    The empirical literature on Unemployment insurance has focused on its direct effect on Unemployment Duration, while the potential indirect effect on employment stability through a more efficient matching process, as the unemployed can search for a longer period, has attracted much less attention. In the European context this is surprising as reform proposals of the Unemployment insurance system aiming at reducing high European Unemployment rates should consider both effects. This paper provides evidence on the effect of Unemployment benefits on Unemployment and employment Duration in Europe, using individual data from the European Community Household Panel for eight countries. Country specific estimates based on a multivariate discrete proportional hazard model, controlling for observed and unobserved individual heterogeneity, suggest that even if receiving benefits has a direct negative effect increasing the Duration of Unemployment spells, there is also a positive indirect effect of benefits on subsequent employment Duration. This indirect effect is pronounced in countries with relatively generous benefit systems, and for recipients who have remained unemployed for at least six months. In terms of the magnitude of the effect, recipients remain employed on average two to four months longer than non-recipients. This represents a ten to twenty per cent increase relative to the average employment Duration, compensating for the additional time spent in Unemployment. These findings are in line with theories suggesting a matching effect of Unemployment insurance.

John T Addison - One of the best experts on this subject based on the ideXlab platform.

  • Unemployment Duration competing and defective risks
    Journal of Human Resources, 2003
    Co-Authors: John T Addison, Pedro Portugal
    Abstract:

    This paper examines the determinants of Unemployment Duration in a competing risks framework with two destination states: inactivity and employment. The innovation is the recognition of defective risks. A polynomial hazard function is used to differentiate between two possible sources of infinite Durations. The first is produced by a random process of unlucky draws, the second by workers rejecting a destination state. The evidence favors the mover-stayer model over the search model. Refinement of the former approach, using a more flexible baseline hazard function, produces a robust and more convincing explanation for positive and zero transition rates out of Unemployment.

  • Unemployment Duration competing and defective risks
    Social Science Research Network, 2001
    Co-Authors: Pedro Portugal, John T Addison
    Abstract:

    This paper examines the determinants of Unemployment Duration in a competing risks framework with two destination states, namely, inactivity and employment. The major innovation is our recognition of defective risks. We first use a polynomial hazard function to test for the presence of two-sources of defective risks: search involving a random process of unlucky draws that yields a non-proper Duration distribution; and a split-population model in which the decision by some individuals not to consider certain destination states produces a defective distribution. Having established the primacy of the latter model, we refine it using a more flexible piecewise-constant baseline hazard function. This specification broadly confirms our earlier findings but offers a more convincing explanation for positive and zero transition rates out of Unemployment. Although we do not reject the null of proportionality, abandoning the proportionality assumption does not materially alter our conclusions.

  • Unemployment Duration competing and defective risks
    Research Papers in Economics, 2000
    Co-Authors: John T Addison, Pedro Portugal
    Abstract:

    This paper examines the determinants of Unemployment Duration in the framework of a competing risks model, where the destination states are employment and inactivity. The major innovation is the use of a split-population approach to accommodate the presence of defective risks in the context of the competing risks model. Certain of the regressors that affect the conditional hazards are allowed to influence defective risks. Unobserved individual heterogeneity among the susceptible populations is also controlled for. Access to Unemployment benefits and age are accorded special emphasis because of their influence on defective risks and escape rates.

Michael Rosholm - One of the best experts on this subject based on the ideXlab platform.

  • the effect of receiving supplementary ui benefits on Unemployment Duration
    Social Science Research Network, 2009
    Co-Authors: Tomi Kyyra, Michael Rosholm, Pierpaolo Parrotta
    Abstract:

    We consider the consequences of working part-time on supplementary Unemployment insurance benefits in the Danish labour market. Following the timing-of-events approach we estimate causal effects of subsidized part-time work on the hazard rate out of Unemployment insurance benefit receipt. We find evidence of a negative lock-in effect and a positive post-treatment effect, both of which vary across individuals. The resulting net effect on the expected Unemployment Duration is positive for some groups (e.g. married women) and negative for others (e.g. young workers).

  • the threat effect of active labour market programmes
    The Scandinavian Journal of Economics, 2008
    Co-Authors: Michael Rosholm, Michael Svarer
    Abstract:

    In this paper, we estimate the threat effect of active labour market programmes (ALMPs) for a sample of unemployed men in Denmark. Threat effects of such programmes capture the impacts of a system of ALMPs prior to actual participation. Rational economic agents make search decisions based on the expected discounted value of Unemployment, and the perceived risk of future participation in programmes may affect job-search behaviour early in the Unemployment spell. We find a strong and significant threat effect, which is shown to reduce average Unemployment Duration by two and a half weeks.

  • are homeowners really more unemployed
    The Economic Journal, 2006
    Co-Authors: Jakob Roland Munch, Michael Rosholm, Michael Svarer
    Abstract:

    This paper investigates the effects of home-ownership on labour mobility and Unemployment Duration. We distinguish between finding employment locally or by being geographically mobile. We find that home ownership hampers the propensity to move for job reasons but improves the chances of finding local jobs, which is in accordance with the predictions from our theoretical model. The overall hazard rate into employment is higher for home owners, such that there is a negative correlation between home-ownership and Unemployment Duration. Our empirical findings thus lend some support for the main mechanism behind the so-called Oswald hypothesis, even if it does not find positive correlation between Unemployment Duration and home ownership at the individual level.

  • rent control and Unemployment Duration
    Journal of Public Economics, 2005
    Co-Authors: Michael Svarer, Michael Rosholm, Jakob Roland Munch
    Abstract:

    In this paper we analyse how rent control affects the Duration of individual Unemployment. In a theoretical search model we distinguish between two effects of rent control. On one hand, rent control reduces housing mobility and hence mobility in the labour market. On the other hand, to maintain rent control benefits, unemployed individuals are more likely to accept job offers in the local labour market. Based on a rich Danish data set, we find that the probability of finding a local job increases with the rent control intensity of the housing unit, whereas the probability of finding a job outside the local labour market decreases with the rent control intensity.

  • estimating the threat effect of active labour market programmes
    2004
    Co-Authors: Michael Rosholm, Michael Svarer
    Abstract:

    We combine two techniques to consistently estimate the effect of active labour market programmes and, in particular, active labour market policy regimes. Our aim is to explicitly estimate the threat effect of active labour market programmes. Based on Danish data (1998-2002) from administrative registers we find a strong and significantly positive threat effect. The threat effect is shown to reduce average Unemployment Duration by approximately three weeks. The implications of this result are discussed.

Rafael Lalive - One of the best experts on this subject based on the ideXlab platform.

  • how do extended benefits affect Unemployment Duration a regression discontinuity approach
    Journal of Econometrics, 2008
    Co-Authors: Rafael Lalive
    Abstract:

    This paper studies a targeted program that extends the maximum Duration of Unemployment benefits from 30 weeks to 209 weeks in Austria. Sharp discontinuities in treatment assignment at age 50 and at the border between eligible regions and control regions identify the effect of extended benefits on Unemployment Duration. Results indicate that the Duration of job search is prolonged by at least 0.09 weeks per additional week of benefits among men, whereas Unemployment Duration increases by at least 0.32 weeks per additional week of benefits for women. This finding is consistent with a lower early retirement age applying to women.

  • the impact of active labour market programmes on the Duration of Unemployment in switzerland
    The Economic Journal, 2008
    Co-Authors: Rafael Lalive, Jan C Van Ours, Josef Zweimuller
    Abstract:

    This article evaluates the effects of Swiss active labour market programmes on the job chances of unemployed workers. The main innovation is a comparison of two important dynamic evaluation estimators: the 'matching' estimator and the 'timing-of-events' estimator. We find that both estimators generate different treatment effects. According to the matching estimator temporary subsidised jobs shorten Unemployment Duration whereas training programmes and employment programmes do not. In contrast, the timing-of-events estimator suggests that none of the Swiss active labour market programmes shortens Unemployment Duration. Copyright 2008 The Author(s). Journal compilation Royal Economic Society 2008.

  • the impact of active labour market programmes on the Duration of Unemployment in switzerland
    The Economic Journal, 2008
    Co-Authors: Rafael Lalive, Jan C Van Ours, Josef Zweimuller
    Abstract:

    This article evaluates the effects of Swiss active labour market programmes on the job chances of unemployed workers. The main innovation is a comparison of two important dynamic evaluation estimators: the 'matching' estimator and the 'timing-of-events' estimator. We find that both estimators generate different treatment effects. According to the matching estimator temporary subsidised jobs shorten Unemployment Duration whereas training programmes and employment programmes do not. In contrast, the timing-of-events estimator suggests that none of the Swiss active labour market programmes shortens Unemployment Duration. The aim of the present article is to study the impact of active labour market policies (ALMPs) on the Duration of Unemployment in Switzerland. The new Swiss ALMPs reflect the increasing consensus among policy makers that actively assisting the unemployed in job search is preferable to simply providing them with passive income support. The danger is, so the argument goes, that reliance on passive income support may reduce work incentives and job-search activities and therefore increase the risk of long-term Unemployment. ALMPs are seen by many as the key to minimise these risks. The question how participation in ALMP-measures affects labour market histories of individuals has been the subject of substantial debate. The main problem is that labour market outcomes for participants may be systematically different from non-participants

  • Unemployment Benefits, Unemployment Duration, and Post-Unemployment Jobs: A Regression Discontinuity Approach
    American Economic Review, 2007
    Co-Authors: Rafael Lalive
    Abstract:

    Structural Unemployment appears to be strongly correlated with the potential Duration of Unemployment across Organization for Eco­ nomic Co­operation and Development (OECD) countries (Stephen Nickell and Richard Layard 1999). The idea is that extended benefit Duration discourages searching for a job and thus leads to prolonged Unemployment. In this paper, I propose testing this idea by studying discontinuous changes in benefit dura­ tion at the age of 50, which are embedded in the Austrian Unemployment insurance system. In particular, job seekers who become unem­ ployed at 50 years of age or older and satisfy a previous work requirement are eligible for 52 weeks of extended benefits rather than 39 weeks. Moreover, due to special restructuring demands in the state­owned steel sector, Austria temporarily implemented a regional extended benefit program (REBP) covering job seekers who enter Unemployment at 50 years of age or older, who had been living in certain regions of Austria for at least six months, and who satisfy a previous work requirement. Those individuals were eligible for 209 weeks of benefits instead of 39 weeks. Austrian Unemployment insurance rules create a rich design allowing us to study the effects of small increases in benefits by 13 weeks (39 to 52 weeks) in regions that were excluded from the extended benefit program and large benefit extensions by 170 weeks (39 weeks to 209 weeks) in regions with access to the extended benefit program. Because these benefit entitlement rules were discontinuous in age, the corresponding causal effects can be identified in a regression discontinuity framework. This paper contributes to two strands of the literature. The first strand is concerned with measuring the effects of potential benefit dura­ tion on Unemployment Duration. Recent con­ tributions to this literature include David Card Unemployment Benefits, Unemployment Duration, and Post-Unemployment Jobs: A Regression Discontinuity Approach

  • how do extended benefits affect Unemployment Duration a regression discontinuity approach
    Research Papers in Economics, 2006
    Co-Authors: Rafael Lalive
    Abstract:

    This paper studies a program that extends the maximum Duration of Unemployment benefits from 30 weeks to 209 weeks. Interestingly, this program is targeted to individuals aged 50 years or older, living in certain eligible regions in Austria. In the evaluation, I use sharp discontinuities in treatment assignment at age 50 and at the border between eligible regions and control regions to identify the effect of extended benefits on Unemployment Duration. Results indicate that the Duration of job search is prolonged by at least .09 weeks per additional week of benefits among men, whereas Unemployment Duration increases by at least .32 weeks per additional week of benefits among women. The salient differences between men and women are consistent with the lower minimum age for early retirement applying to women.

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