Duration dependence and exits from youth unemployment in Spain and the Czech Republic

Abstract

We estimate the impact of unemployment duration on exits from unemployment, along with a set of individual and other explanatory variables. The analysis is based on EU-SILC longitudinal data for the period 2007–2010 and involves Spain and the Czech Republic as examples of the two EU countries with remarkably different labour market performance but similar in their totalitarian past, post-transition economies and recent EU entry. Survival functions estimates point uniformly to prolonged unemployment duration and increasing long-term unemployment. However, both these tendencies apply relatively more to the young unemployed. Estimations of hazard models indicate that shorter unemployment spells are more likely to be terminated by finding a job in comparison with spells lasting for more than one year. The hazard ratios are usually higher for prime age unemployed. Finally, we examine education, gender, household size, etc., as determinants of exits from unemployment, with uniform evidence found for university graduates only.