Risk Of Long-term Unemployment Research Articles

Does country of resettlement influence the risk of labor market marginalization among refugees? A cohort study in Sweden and Norway.

This study aimed to compare the risk of labor market marginalization among refugees across different host countries of resettlement and examine the moderating role of birth country and length of stay on these associations. Cohorts of refugees and native-born individuals aged 19-60 in Sweden (N=3 605 949, 3.5% refugees) and Norway (N=1 784 861, 1.7% refugees) were followed during 2010-2016. Rates (per 1000 person-years) of long-term unemployment, long-term sickness absence, and disability pension were estimated for refugees and the host populations. Cox regression models estimated crude and adjusted (for sex, age, educational level, and civil status) hazard ratio (HRadj) for refugees compared to their respective host population, with 95% confidence intervals (CI). Analyses were also stratified by birth country and length of stay. Refugees in Norway and Sweden had a higher incidence of labor market marginalization compared to their host population. Refugees in Sweden had a comparatively lower relative risk of long-term unemployment but higher risk of disability pension (HRadj 3.44, 95% CI, 3.38-3.50 and HRadj 2.45, 2.35-2.56, respectively) than refugees in Norway (HRadj 3.70, 3.58-3.82 and HRadj 1.57, 1.49-1.66, respectively). These relative risks varied when stratifying by birth country. A shorter length of stay was associated with a higher risk of long-term unemployment and a lower risk of disability pension, with a stronger gradient in Sweden than in Norway. The relative risk of labor market marginalization varied by the refugees' birth country but followed similar trends in Sweden and Norway. Although speculative, these findings may hint at non-structural factors related to the refugee experience playing a more important role than host country structural factors for the risk of labor market marginalization among refugees. Future research, including host countries with more variability in structural factors, is required to further investigate these associations. The higher risk of long-term unemployment among refugees with shorter length of stay indicates a need for more efficient labor market integration policies for newly-arrived refugees.

Stock-Bond Allocation over the Life Cycle with Long-Term Unemployment Risk

Stock-Bond Allocation over the Life Cycle with Long-Term Unemployment Risk

Period effects in the risk of labour market marginalization among refugees in Sweden: cohort study

Abstract Background Changes in Swedish national insurance policies over time and/or migration-related health inequalities may influence the risk for labour market marginalization (LMM) in refugees as compared to the Swedishborn host population. This study aimed to investigate potential period effects in the association between refugee status and the risk of LMM and explore any differences by country of birth, age and duration of residence. Methods Using national registers, three cohorts including all Swedish residents during 1999, 2004 and 2009 were followed for 4 years (cohort 2000, 2005 and 2010). Cox regression models were used to examine associations between refugee status and LMM defined as long-term unemployment (>180 days annually) and disability pension. The analyses were adjusted for socio-demographic factors, morbidities and labour market-related factors. Stratified analyses were run for age, country of birth and duration of residence. Results Across the cohorts, hazard ratios (HRs) were higher for long-term unemployment [2000: HR = 1.98; 95% confidence interval (CI): 1.96-2.01; 2005: HR = 2.30; 95% CI: 2.27-2.33; 2010: HR = 2.78; 95% CI: 2.75-2.81] for refugees compared to Swedish-born but not for disability pension. HRs for long-term unemployment were highest among refugees aged 25-34 and 35-44 years, from Somalia, Afghanistan and Iraq and refugees with a shorter duration of residence. Conclusions The risk of long-term unemployment appears to have increased for refugees over time. Particularly some refugee subgroups experienced more difficulties. These findings highlight ongoing disparities for refugees and implicate on a broader scale that changes in policies such as stricter regulations in the insurance or healthcare system might adversely affect them. Key messages • A period effect for long-term unemployment among refugees as compared to Swedish-born could be observed, and increases in the risk estimates were particularly pronounced for specific subgroups. • Refugees seem to face increasing challenges and difficulties over time to access the labour market and changes in policies might adversely affect this situation.

Period effects in the risk of labour market marginalization among refugees in Sweden: a register-based cohort study.

Changes in Swedish national insurance policies over time and/or migration-related health inequalities may influence the risk for labour market marginalization (LMM) in refugees as compared to the Swedish-born host population. This study aimed to investigate potential period effects in the association between refugee status and the risk of LMM and explore any differences by country of birth, age and duration of residence. Using national registers, three cohorts including all Swedish residents during 1999, 2004 and 2009 were followed for 4 years (cohort 2000, 2005 and 2010). Cox regression models were used to examine associations between refugee status and LMM defined as long-term unemployment (>180 days annually) and disability pension. The analyses were adjusted for socio-demographic factors, morbidities and labour market-related factors. Stratified analyses were run for age, country of birth and duration of residence. Across the cohorts, hazard ratios (HRs) were higher for long-term unemployment [2000: HR = 1.98; 95% confidence interval (CI): 1.96-2.01; 2005: HR = 2.30; 95% CI: 2.27-2.33; 2010: HR = 2.78; 95% CI: 2.75-2.81] for refugees compared to Swedish-born but not for disability pension. HRs for long-term unemployment were highest among refugees aged 25-34 and 35-44 years, from Somalia, Afghanistan and Iraq and refugees with a shorter duration of residence. The risk of long-term unemployment appears to have increased for refugees over time. Particularly some refugee subgroups experienced more difficulties. These findings highlight ongoing disparities for refugees and implicate on a broader scale that changes in policies such as stricter regulations in the insurance or healthcare system might adversely affect them.

Differences in labour market marginalisation among young immigrant groups and Swedish-born youth

Abstract Background There is a knowledge gap regarding the risk for labour market marginalisation among younger cohorts of refugees and non-refugee immigrants. We investigated if the risk of long-term unemployment (LTU) and disability pension (DP) differs between young refugees and non-refuge immigrants compared to the Swedish-born. The role of age at arrival, duration of residency and morbidity in this association was also investigated. Methods All 19- to 25-year-olds residing in Sweden on 31 December 2004 (1691 refugees who were unaccompanied by a parent at arrival, 24,697 accompanied refugees, 18,762 non-refugee immigrants and 621,455 Swedish-born individuals) were followed from 2005 to 2016 regarding LTU (>180 days annually) and DP using nationwide register data. Cox regression models were used to estimate crude and multivariate-adjusted (adjusted for several socio-demographic, labour market and health-related covariates) hazard ratios (aHRs) with 95% confidence intervals. Results Compared to the Swedish-born, all migrant groups had around a 1.8-fold higher risk of LTU (range aHR=1.71-1.83) and around a 30% lower risk of DP (range aHR=0.66-0.76). Older age at arrival was associated with a higher risk of LTU only for non-refugee immigrants. Both older age at arrival and a shorter duration of residency were associated with a lower risk of DP for all migrant groups. Psychiatric morbidity had the strongest effect on subsequent DP, with no significant differences between migrant groups and the Swedish-born (range aHR=5.1-6.1). Conclusions Young immigrants had a higher risk of LTU and a lower risk of DP than their Swedish-born peers. No differences between the different immigrant groups were found. Age at arrival, psychiatric morbidity and duration of residency are strong determinants of being granted DP. Key messages

Association Between Pharmacological Treatment of Attention-Deficit/Hyperactivity Disorder and Long-term Unemployment Among Working-Age Individuals in Sweden

Adults with attention-deficit/hyperactivity disorder (ADHD) are at greater risk for unemployment. Pharmacological treatment is effective in reducing the core symptoms of ADHD, but whether it helps to reduce the unemployment rate among adult patients remains unclear. To investigate the association between use of ADHD medication and long-term unemployment in working-age adults with ADHD. Data for this population-based cohort study were extracted from Swedish national registers. Among 25 358 individuals with ADHD born from 1958 to 1978, 12 875 middle-aged adults among the workforce were included. The longitudinal cohort was followed up from January 1, 2008, to December 31, 2013. Data were analyzed from March 1, 2020, through May 31, 2021. Use of medication for ADHD during the previous 2 years was the main exposure, as both categorical and continuous variables. Yearly accumulated unemployed days were derived from the Public Employment Service, and long-term unemployment was defined as 90 or more days of unemployment per year. Overall and sex-specific relative risks (RRs) with 95% CIs were estimated using generalized estimating equations. Among 12 875 individuals with ADHD (5343 women [41.50%] and 7532 men [58.50%]; mean [SD] age, 37.9 [5.6] years), the use of ADHD medications during the previous 2 years was associated with a 10% lower risk of long-term unemployment in the following year (adjusted RR, 0.90 [95% CI, 0.87-0.95]). An association between use of ADHD medications and long-term unemployment was found among women (RR, 0.82 [95% CI, 0.76-0.89]) but not men (RR, 0.96 [95% CI, 0.91-1.01]). Longer treatment duration was associated with a lower risk of subsequent long-term unemployment among women (RR for use of 1-6 months, 0.86 [95% CI, 0.78-0.95]; RR for use of 18-24 months, 0.72 [95% CI, 0.58-0.90]; P < .001 for trend). Within-individual comparisons showed that the long-term unemployment rate was lower during periods of ADHD medication treatment compared with nontreatment periods (RR, 0.89; 95% CI, 0.85-0.94). The findings of this cohort study suggest that the use of ADHD medication is associated with a lower risk of subsequent long-term unemployment for middle-aged women. These findings should be considered together with the existing knowledge of risks and benefits of ADHD medication when developing treatment plans for working-age adults.

Differences in labour market marginalisation between refugees, non-refugee immigrants and Swedish-born youth: Role of age at arrival and residency duration.

We investigated if the risk of long-term unemployment (LTU) and disability pension (DP) differs between young refugees and non-refuge immigrants compared to the Swedish-born. The role of age at arrival, duration of residency and morbidity in this association was also investigated. All 19- to 25-year-olds residing in Sweden on 31 December 2004 (1691 refugees who were unaccompanied by a parent at arrival, 24,697 accompanied refugees, 18,762 non-refugee immigrants and 621,455 Swedish-born individuals) were followed from 2005 to 2016 regarding LTU (>180 days annually) and DP using nationwide register data. Cox regression models were used to estimate crude and multivariate-adjusted (adjusted for several socio-demographic, labour market and health-related covariates) hazard ratios (aHRs) with 95% confidence intervals. Compared to the Swedish-born, all migrant groups had around a 1.8-fold higher risk of LTU (range aHR=1.71-1.83) and around a 30% lower risk of DP (range aHR=0.66-0.76). Older age at arrival was associated with a higher risk of LTU only for non-refugee immigrants. Both older age at arrival and a shorter duration of residency were associated with a lower risk of DP for all migrant groups. Psychiatric morbidity had the strongest effect on subsequent DP, with no significant differences between migrant groups and the Swedish-born (range aHR=5.1-6.1). Young immigrants had a higher risk of LTU and a lower risk of DP than their Swedish-born peers. No differences between the different immigrant groups were found. Age at arrival, psychiatric morbidity and duration of residency are strong determinants of being granted DP.

Association between migration status and subsequent labour market marginalisation among individuals with posttraumatic stress disorder: a Swedish nationwide register-based cohort study

PurposeThe high prevalence of posttraumatic stress disorder (PTSD) among migrants in Europe is widely reported. Our research aimed to investigate the association between migration status and subsequent labour market marginalisation (LMM) events, i.e., long-term unemployment (LTU), long-term sickness absence (LTSA), and disability pension (DP) among individuals with PTSD, and to elucidate how the sociodemographic factors and the pre-existing health conditions influence such association.MethodsWe established a cohort of 36,714 individuals born between 1960 and 1995, living in Sweden during 2004–2009, aged 19 years or above, with PTSD diagnosis during 2006–2009. Migration status, categorized as refugees, non-refugees, second-generation migrants, and Swedish-born with Swedish-born parents (reference group) was considered as exposure and LMM events as outcome. The cohort was followed from 01-Jan-2010 until LMM, death, or end of follow-up (31-Dec-2016). Hazard ratios (HRs) with 95% confidence intervals (CIs) were estimated by Cox regression with a seven-year follow-up.ResultsRefugees (HR 2.07, 95% CI 1.86–2.30), and non-refugees (HR 1.96, 95% CI 1.85–2.07) had almost doubled relative risk of long-term unemployment, compared with the Swedish-born. The hazards of long-term sickness absence were similar across the groups. Refugees (HR 1.49, 95% CI 1.24–1.77), and non-refugees (HR 1.42, 95% CI 1.30–1.56) also had elevated relative risk of disability pension, whereas second-generation migrants had moderately increased relative risks for all three labour market marginalisation events compared with the Swedish-born.ConclusionAmong the individuals with PTSD, being a migrant increases the risk of LMM, refugees being the foremost among migrants. Further research may benefit from including more recent migrant population, pre-migration information and measuring PTSD clinical severity.

Auditing Risk Prediction of Long-Term Unemployment

As more and more governments adopt algorithms to support bureaucratic decision-making processes, it becomes urgent to address issues of responsible use and accountability. We examine a contested public service algorithm used in Danish job placement for assessing an individual's risk of long-term unemployment. The study takes inspiration from cooperative audits and was carried out in dialogue with the Danish unemployment services agency. Our audit investigated the practical implementation of algorithms. We find (1) a divergence between the formal documentation and the model tuning code, (2) that the algorithmic model relies on subjectivity, namely the variable which focus on the individual's self-assessment of how long it will take before they get a job, (3) that the algorithm uses the variable "origin" to determine its predictions, and (4) that the documentation neglects to consider the implications of using variables indicating personal characteristics when predicting employment outcomes. We discuss the benefits and limitations of cooperative audits in a public sector context. We specifically focus on the importance of collaboration across different public actors when investigating the use of algorithms in the algorithmic society.

Are Jobs Available in the Market? A Perspective from the Supply Side

Graduate unemployment exhibits a clear increasing global trend, and Malaysia is no exception. The unemployment rate among graduates is witnessing a considerable upsurge, growing from 43,800 in 2000 (15% of total unemployed) to more than 175,500 in 2017 (35%). Numerous programmes have been implemented in order to secure jobs for the unemployed in the labour market; however, the number of unemployed graduates keeps on increasing. It is significant to recognise the main reason behind this issue to tackle the risk of long-term unemployment, specifically from the supply side. Using the Relative Importance Index (RII), this study investigated 402 respondents at selected job fairs to identify the cause of their difficulty in entering the labour market. The findings revealed that the unemployed people believe that the principal cause of their unemployment is the lack of suitable jobs for them in the market. This circumstance sends a signal of asymmetric information between demand and supply in the labour market, especially to young graduates.

Risk of labour market marginalisation among young refugees and non-refugee migrants with common mental disorders

PurposeLabour market marginalisation (LMM), i.e. long-term unemployment (LTU), long-term sickness absence (LTSA) and disability pension (DP), among young individuals with common mental disorders (CMDs) are a challenge for the welfare system, and refugees and non-refugee migrants seem particularly vulnerable. The aim was to investigate the risk of LMM in young adults with CMDs among refugees and non-refugee migrants compared to Swedish-born individuals and the role of country of birth, duration of residence and age at arrival.MethodsA prospective cohort study was conducted including young adults (19–30 years) with inpatient or specialised outpatient healthcare due to CMDs and/or antidepressant prescriptions during 2009 (N = 69,515). Cox regression models were used to calculate hazard ratios (HRs) with 95% confidence intervals for the risk of LMM during 2010–2013.ResultsBoth refugees and non-refugee migrants had a higher risk of LTU compared to Swedish-born individuals (HR refugees: Africa: 2.4; Asia: 2.2; Europe outside EU25: 1.6; South America: 1.4) with highest estimates in refugees from Afghanistan and Syria. Refugees from Africa and Asia had a lower risk of LTSA compared to Swedish-born individuals (HR: 0.6 and 0.7, respectively), particularly refugees from Afghanistan and Iraq. Especially among refugees, a longer duration of residence and a younger age at arrival were associated with a lower risk of LTU.ConclusionsThe risk of LTU among refugees and non-refugee migrants was higher and the risk of LTSA was lower, compared to Swedish-born individuals. Duration of residence and age at arrival had an influence on the risk of LTU, particularly among refugees.

Centering the Complexity of Long-Term Unemployment: Lessons Learned from a Critical Occupational Science Inquiry

Inquiries that rely on temporal framings to demarcate long-term unemployment risk generating partial understandings and grounding unrealistic policy solutions. In contrast, this four-phase two-context study aimed to generate complex understandings of post-recession long-term unemployment in North America. Grounded in a critical occupational perspective, this collaborative ethnographic study also drew on street-level bureaucracy and governmentality perspectives to understand how social policies and discursive constructions shaped people’s everyday ‘doing’ within the arena of long-term unemployment. Across three phases, study methods included interviews with 15 organizational stakeholders who oversaw employment support services; interviews, participant observations, and focus groups with 18 people who provided front-line employment support services; and interviews, participant observations, time diaries, and occupational mapping with 23 people who self-identified as being long-term unemployed. We draw on selected interviews and mapping data to illustrate how participants’ definitions and experiences of long-term unemployment reflected and moved beyond dominant temporally based framings. These findings reinforce the need to expand the dominant conceptualizations of long-term unemployment that shape scholarly inquiries and policy responses. Reflections on the benefits and challenges of this study’s design also reinforce the need to use multiple, flexible methods to center the complexity of long-term unemployment as it is experienced in everyday life.

Adverse outcomes of chronic widespread pain and common mental disorders in individuals with sickness absence \u2013 a prospective study of Swedish twins

BackgroundChronic widespread pain (CWP) and common mental disorders (CMDs) are common public health problems, but little is known about the role of CWP and CMDs on future adverse outcomes among work disabled individuals. The aims of the study were to investigate the associations between CWP and CMDs with subsequent disability pension (DP), long-term unemployment (> 90 days) and all-cause mortality in individuals with sickness absence (SA) and whether the associations were explained by familial factors.MethodsIn this prospective cohort study, 7884 Swedish twins born between 1933 and 1985 were included and baseline data were gathered from a questionnaire in 1998 to 2006. Register data were used for obtaining information regarding demographics, SA, DP, unemployment and mortality. Cox proportional hazards regressions were used to calculate Hazard Ratios (HR) with 95% Confidence Intervals (CI) for the associations between CWP and/or CMDs with DP, unemployment and mortality, while conditional Cox models for twin pairs provided control for familial confounding.ResultsHaving either CWP or CMDs among those with a history of SA was associated with a higher risk of DP and all-cause mortality than individuals without CWP and CMDs after controlling for socio-demographic and health factors. Moreover, sick-listed individuals with both CWP and CMDs had a higher risk of DP while those who only had CMDs had a higher risk of long-term unemployment compared to those without CWP and CMDs. The association between CMDs with DP and long-term unemployment was no longer significant when controlling for familial factors.ConclusionsCMDs was a risk factor for DP, unemployment and mortality among individuals with SA, while CWP seems to be important in relation to future DP and mortality. Familial factors played a role in the associations between CMDs and DP and CMDs and unemployment.

Algorithmic Long-Term Unemployment Risk Assessment in Use: Counselors’ Perceptions and Use Practices

The recent surge of interest in algorithmic decision-making among scholars across disciplines is associated with its potential to resolve the challenges common to administrative decision-making in the public sector, such as greater fairness and equal treatment of each individual, among others. However, algorithmic decision-making combined with human judgment may introduce new complexities with unclear consequences. This article offers evidence that contributes to the ongoing discussion about algorithmic decision-making and governance, contextualizing it within a public employment service. In particular, we discuss the use of a decision support system that employs an algorithm to assess individual risk of becoming long-term unemployed and that informs counselors to assign interventions accordingly. We study the human interaction with algorithms in this context using the lenses of human detachment from and attachment to decision-making. Employing a mixed-method research approach, we show the complexity of enacting the potentials of the data-driven decision-making in the context of a public agency.

The role of refugee status and mental disorders regarding subsequent labour market marginalisation: a register study from Sweden

PurposeThis study aimed to assess the role of refugee status and specific mental disorders regarding subsequent labour market marginalisation.MethodsProspective cohort study of all refugees (n = 216,930) and Swedish-borns (n = 3,841,788), aged 19–60 years, and resident in Sweden in 2009. Hazard ratios (HRs) with 95% Confidence Intervals (CIs) for long-term unemployment (> 180 days) and disability pension (DP) were calculated with Cox regression analyses.ResultsMental disorders were more prevalent in refugees compared to Swedish-born individuals, with greatest differences seen for post-traumatic stress disorder (PTSD; refugees 1.3%; Swedish-born individuals 0.1%). Regarding long-term unemployment, refugees without a mental disorder had an adjusted HR (aHR) of 2.68 (95% CI 2.65–2.71) compared to Swedish-born individuals without mental disorders, which was above the aHR of refugees (aHR 2.33, 95% CI 2.29–2.38) and Swedish-born individuals (aHR 1.44, 95% CI 1.43–1.45) with mental disorders. Regarding DP, compared to Swedish-born individuals without mental disorders, the aHRs were 1.44 (95% CI 1.34–1.54) for refugees without, but 6.11 (95% CI 5.84–6.39) for refugees with mental disorders. Swedish-born individuals with mental disorder had an aHR of 3.96 (95% CI 3.85–4.07). With regard to specific disorders, the aHRs for refugees, as compared to Swedish-born individuals without mental disorders, were markedly increased for all disorders (e.g. PTSD: long-term unemployment aHR: 2.03 (95% CI 1.89–2.18); DP 7.07 (95% CI 6.42–7.78).ConclusionMental disorders are more prevalent in refugees than in Swedish-born individuals but do not appear to increase their risk of long-term unemployment. Refugee status and mental disorders strongly contribute to the risk of DP, indicating that factors beyond medical considerations contribute to their granting of DP.

Data-Driven Approach for Predicting and Explaining the Risk of Long-Term Unemployment

Long-term unemployment has significant societal impact and is of particular concerns for policymakers with regard to economic growth and public finances. This paper constructs advanced ensemble machine learning models to predict citizens’ risks of becoming long-term unemployed using data collected from European public authorities for employment service. The proposed model achieves 81.2% accuracy on identifying citizens with high risks of long-term unemployment. This paper also examines how to dissect black-box machine learning models by offering explanations at both a local and global level using SHAP, a state-of-the-art model-agnostic approach to explain factors that contribute to long-term unemployment. Lastly, this paper addresses an under-explored question when applying machine learning in the public domain, that is, the inherent bias in model predictions. The results show that popular models such as gradient boosted trees may produce unfair predictions against senior age groups and immigrants. Overall, this paper sheds light on the recent increasing shift for governments to adopt machine learning models to profile and prioritize employment resources to reduce the detrimental effects of long-term unemployment and improve public welfare.

Provincial Data-linkage to Address Complex Policy Challenges

IntroductionThe Province of British Columbia, Canada has established a Data Innovation Program (DI Program) and a Data Science Partnerships Program (DSP Program) to use integrated public-sector data to drive insights into complex policy challenges and support the public good. These programs are a part of the province's new Integrated Data.&#x0D; Objectives and ApproachThe DI Program was built to enable policy decisions based on a more complete picture of the citizen journey across and throughout government programs. It provides a privacy and security framework for corporate data analytics and a cross-government secure research environment. The DSP Program provides analytics and/or project support for high-priority cross-government projects. The opportunity afforded by this approach to policy decision-making is that valuable data and evidence from multiple sectors can be utilized to make positive changes in the lives of citizens.&#x0D; ResultsThe IDO has partnered with cross government experts on a series of pilot projects that used linked data spanning social services, families and households, education, and health and clinical records. Research topics ranged from the prediction of risk of long-term unemployment, to the impact of the foreign home buyers tax, to the effectiveness of labour market programs. Throughout our presentation we will use these projects as case examples to address the benefits and opportunities provided through our citizen-centred, integrated approach.&#x0D; Conclusion/ImplicationsThe future of policy decision-making in terms of service delivery relies on mutually beneficial collaboration and the evidence-based insight available through integrated data. Moving forward, it is essential that researchers across government make the most out of integrated population-level data to solve pressing issues affecting the lives of citizens.

Learning about job search: A field experiment with job seekers in Germany

We conduct a large-scale field experiment in the German labor market to investigate how information provision affects job seekers' employment prospects and labor market outcomes. Individuals assigned to the treatment group of our experiment received a brochure that informed them about job search strategies and the consequences of unemployment, and motivated them to actively look for new employment. We study the causal impact of the brochure by comparing labor market outcomes of treated and untreated job seekers in administrative data containing comprehensive information on individuals' employment status and earnings. The effects of our treatment tend to be positive, but concentrated among job seekers who are at risk of being unemployed for an extended period of time. Specifically, treatment effects in our overall sample are moderately positive on average, but mostly insignificant. At the same time, we do observe pronounced and statistically significant effects for individuals who exhibit an increased risk of long-term unemployment. For this group, the brochure increases employment and earnings in the year after the intervention by roughly 4%. Given the low cost of the intervention, our findings indicate that targeted information provision can be a highly effective policy tool in the labor market.

Are the Spanish long-term unemployed unemployable?

Long-term unemployment reached unprecedented levels in Spain in the wake of the Great Recession and it still affects around 57% of the unemployed. We document the sources that contributed to the rise in long-term unemployment and analyze its persistence using state-of-the-art duration models. We find pervasive evidence of negative duration dependence, while personal characteristics such as mature age, lack of experience, and entitlement to unemployment benefits are key to understand the cross-sectional differences in the incidence of long-term unemployment. The negative impact of low levels of skill and education is muted by the large share of temporary contracts, but once we restrict attention to employment spells lasting at least 1 month these factors also contribute to a higher risk of long-term unemployment. Surprisingly, workers from the construction sector do not fare worse than similar workers from other sectors. Finally, self-reported reservation wages are found to respond strongly to the cycle, but much less to individual unemployment duration. In view of these findings, we argue that active labor market policies should play a more prominent role in the fight against long-term unemployment while early activation should be used to curb inflows.

Are the Spanish Long-Term Unemployed Unemployable?

Long-term unemployment reached unprecedented levels in Spain in the wake of the Great Recession and it still affects around 57% of the unemployed. We document the sources that contributed to the rise in long-term unemployment and analyze its persistence using state-of-the-art duration models. We find pervasive evidence of negative duration dependence, while personal characteristics such as mature age, lack of experience, and entitlement to unemployment benefits are key to understand the cross-sectional differences in the incidence of long-term unemployment. The negative impact of low levels of skill and education is muted by the large share of temporary contracts, but once we restrict attention to employment spells lasting at least one month these factors also contribute to a higher risk of long-term unemployment. Surprisingly, workers from the construction sector do not fare worse than similar workers from other sectors. Finally, self-reported reservation wages are found to respond strongly to the cycle, but much less to individual unemployment duration. In view of these findings, we argue that active labour market policies should play a more prominent role in the fight against long-term unemployment while early activation should be used to curb inflows.