Negative Duration Dependence Research Articles

Modelling Job‐Search Duration from the Italian Labour Force Data

ABSTRACT: Micro (and possibly panel) data from the Labour Force Surveys are a valuable source for analysing the labour supply behaviour. Among the information collected by the quarterly Italian Labour Force Survey conducted by ISTAT (the Italian national statistical agency), there are data on the duration of job‐search.From a single survey, one can only know the duration of search up to the time of the interview. Nonetheless, by appropriately exploiting the longitudinal structure of the survey (the sample scheme is a rotated one, with a 50|X% overlapping of the sample units in two subsequent quarters) it is possible to measure, although imperfectly, some completed spells of job‐search.In this paper, we try to model the duration of job‐search for a sample of young unemployed. Considerable attention is devoted to the measure of duration of search, and to the evaluation of its accuracy. A one state proportional hazard model is specified and estimated, accounting also for unobserved heterogeneity.The model is estimated on a sample of young (15 to 29 years old) unemployed in January 1986 reinterviewed in April, in an Italian region (Lombardy).The major finding is a fairly clear evidence, both for males and females, of negative duration dependence, even after accounting for the unobserved heterogeneity that turns out to affect the female population.

An Empirical Study of Long-Term Unemployment in Australia

This paper has two parts. The first part concentrates on modeling transitions out of unemployment using aggregated gross flow data. Models are estimated using monthly transition probabilities for March-April 1984. This analysis produces evidence consistent with negative duration dependence but sheds no light on the role of macroeconomic factors. The second part focuses on this issue. A time-series analysis of the proportion of long-term unemployment using data for four age and sex groups provides evidence that a proportionately greater increase in long-term unemployment in Australia in the 1970s has been associated with reduction in job availability and the effect of certain supply shocks.

Duration dependence, targeted employment subsidies and unemployment benefits

This paper is concerned with the economic justification of targeted employment-training subsidies. It deals with the question: Is the policy of providing training subsidies to employers to hire from a target group of ‘long-term’ unemployment benefit recipients preferable to that of providing unemployment benefits alone in the sense that it can yield a cost reduction? If so, what are the optimal durations of waiting period for enrolment into the training program and the period of subsidy? The answer is shown to depend upon, inter alia, four effects - the disincentive effect on job search of the target group, substitution between subsidised and nonsubsidised workers, negative duration dependence, and the effectiveness of training. The existence of the first two reduces the potential net benefit of the subsidy, whereas that of the last two increases it. Analytically the problem is complex, so a numerical simulation is conducted to provide insights into the interactions between these effects. The nature of duration dependence is shown to be of crucial importance.

State dependency in youth unemployment: A lost generation?

Utilizing a job search framework and survey data on both completed and uncompleted spells of unemployment we present in this paper maximum likelihood estimates of the determinants of re-employment probabilities of young workers in Britain. The model used allows us to examine the importance of state dependency in youth unemployment as well as ethnicity, educational qualifications, and unemployment income. Results suggest that there is strong evidence of negative duration dependence in the transition from unemployment to employment for young workers in Britain.