Transitioning from the University to the Workplace: A Duration Model with Grouped Data

Abstract

Labor market surveys usually measure unemployment duration in time intervals. In these cases, traditional duration models such as Cox regression and parametric survival models are not suitable for studying the duration of unemployment spells. In order to deal with this above issue, we use Han and Hausman’s ordered logit model for grouped durations, which has more flexibility than standard specifications. In particular, its flexibility arises from the fact that we do not need to specify any functional form for the baseline hazard function—it also circumvents problems associated with heterogeneity. The focus of interest is on the first unemployment duration of higher education graduates. The analysis is accomplished by using a large dataset from a graduate survey of Spanish university graduates. The results show that the university-to-work transition of higher education graduates is significantly associated with the graduate’s age, participation in internship programs, field of study, type of university, and gender. Specifically, graduates who participated in internship programs, engineering graduates, and graduates from private universities experience a smooth transition.