Unemployment Spells Research Articles

Youth Entrepreneurship in Indian Scenario

Governments and local communities across the world have recognized that key to building prosperity and stimulate regional growth is fostering entrepreneurship among their people especially youth. Youth entrepreneurship has become a topic of interest for research scholars and also a subject of major concern for the Government. While youth entrepreneurship is an under-explored field, the main factor for its growing attention is the increased number of unemployed young people. Furthermore entrepreneurship is seen as a channel for the talents of many highly educated young people to explore their potential and cash their business acumen. By 2015, World Bank estimates that there will be about 3 billion youths less than 25 years old and a big portion of that will be in India. Many young people cannot find employment. This has become particularly acute since the education explosion in early 2000's and onset of the financial crisis in 2008. These outcomes are both inefficient and inequitable. Evidence shows that the unemployed are unhappier, more likely to experience a range of health issues, and face difficulties in integrating back into the labour market place (Bell & Blanchflower, 2009). For young people, the effects of unemployment may be particularly scarring. Evidence suggests that a spell of youth unemployment increases the likelihood of poorer wages and unemployment in later life (Blanchflower & Oswald, 1998). Such outcomes also have pronounced social costs. It represents a loss of potential output and leads to increased costs to the taxpayer apart from causing social disruptions. One potential way of integrating young people into the global economy is to increase youth entrepreneurship1. The objective of this research paper is simple - to understand youth entrepreneurship and its role with focus on Indian scenario.

Measurement Error in Retrospective Work Histories

Measurement error in retrospective reports of work status has been difficult to quantify in the past. Issues of confidentiality have made access to datasets linking survey responses to a valid administrative source very problematic. This study uses a Swedish register of unemployment as a benchmark against which responses from two survey questions are compared and hence the presence of measurement error elucidated. We carry out separate analyses for the different forms that measurement error in retrospective reports of unemployment can take: miscounting of the number of spells of unemployment, mismeasuring duration in unemployment, and misdating starts of spells and misclassification of status. The prevalence of measurement error for different social categories and interview formats is also examined, leading to a better understanding of the error-generating mechanisms that interact when interviewees are asked to produce retrospective reports of past work status.

Duraçao do desemprego e transições para o emprego formal, a inatividade e a informalidade

Longos periodos de desemprego podem influenciar a probabilidade de o individuo encontrar um emprego, assim como podem ter efeitos sobre a decisao desse individuo sair do mercado de trabalho. Usando dados da PME (Pesquisa Mensal de Emprego) para o periodo entre 2006 e 2013, estimamos modelos de duracao que consideram transicoes do desemprego para o emprego, que pode ser formal ou informal, e para a inatividade. De acordo com os resultados, uma determinada caracteristica individual geralmente apresenta efeitos diferenciados dependendo do tipo de transicao considerado. Os resultados mostram ainda que as probabilidades de transicao para todos os estados analisados aumentam com o tempo de desemprego. Individuos ha mais tempo no desemprego parecem mais propensos a transitar para um emprego formal ou informal, mas tambem a deixarem a forca de trabalho.

Turbulence, training and unemployment

In this paper, we develop a matching model where firms invest in transferable human capital. Workers are endowed with heterogeneous abilities and, as a result of economic turbulence, can undergo a depreciation of their human capital during unemployment spells. Firms take inefficient training decision because they do not fully valuate the additional productivity of the workers in future jobs (poaching externality) and the additional employability after separation (unemployment externality). Higher turbulence reduces the former externality and increases the latter. It then generates some opposite forces on the gap between efficient and equilibrium training, so that it does not necessarily require higher training subsidies. The general equilibrium analysis shows that, even if the Hosios condition holds, unemployment is higher than its efficient level, which requires an additional instrument such as ability-specific employment subsidies. We lastly run some computational experiments based on the French economy to illustrate these results: optimal subsidies are found to increase with turbulence, and the total subsidy turns out to be decreasing with wages, with an efficient rate that is reduced by three from the lowest to the highest wages.

Unemployment Duration in Rural Romania

The purpose of this study is to analyze characteristics of rural unemployment spells and exit destinations in Romania. In a recent paper we proved the existence of an urban-rural gap regarding unemployment spells and exit destinations. Unemployed individuals from rural area have a 37.7% lower exit to a job hazard compared with individuals from urban area, the reference category. The motivation behind choosing this topic was to understand the characteristics of rural registered unemployment spells, to estimate the impact of factors influencing unemployment spells and exit destinations and to identify vulnerable groups regarding reemployment on the labor market. The results can be useful for policy makers, in order to elaborate coherent measures for improving the rural employability and chances of vulnerable individuals. The empirical analysis is based on a large micro-dataset with 1224901 rural unemployment spells registered at the National Agency of Employment Romania during January 1st 2008 – December 31st 2010 and all ongoing spells until April 30th 2011. Non-parametric estimation of survival function and semi-parametric Cox regression was used as a methodological approach.

Évaluation du suivi mensuel personnalisé mis en place par l’ANPE en 2006

In January 2006, the French public employment service (ANPE) implemented the “ SuiviMensuel Personnalisé” (SMP), a new massive follow-up programme to monitor and counsel job seekers. The programme starts four months after their registration and consists in interviewing them every month. This paper evaluates the effect of SMP on registered unemployment spells. Using a difference-in-differences method, we find that SMP shortened unemployment spells to a significant degree, by between5% and 12%. The impactwas greater in 2007 than in 2006, and for long-term recipients of unemployment benefits. Unemployment spells were shortened thanks to higher job finding rates and higher deregistration rates.

Do Employers Use Unemployment as a Sorting Criterion When Hiring? Evidence from a Field Experiment

The stigma associated with long-term unemployment spells could create large inefficiencies in labor markets. While the existing literature points toward large stigma effects, it has proven difficult to estimate causal relationships. Using data from a field experiment, we find that long-term unemployment spells in the past do not matter for employers' hiring decisions, suggesting that subsequent work experience eliminates this negative signal. Nor do employers treat contemporary short-term unemployment spells differently, suggesting that they understand that worker/firm matching takes time. However, employers attach a negative value to contemporary unemployment spells lasting at least nine months, providing evidence of stigma effects. (JEL E24, J23, J64, J71)

Horizontal Career Changes as an Alternative to Premature Exit From Work

Certain workplaces are called jobs with limited tenure. Due to physical or psychosocial risk factors, often coupled with qualification mismatches, workers cannot grow old in them. That may lead to premature exit into retirement, to a period of drawing a work incapacity pension or to a long spell of unemployment. A horizontal career change, which enables the worker to move on to a less burdening workplace while preserving social status, is a possible solution. The objective of the “Horizontal career change—a new job opportunity for older employees” project is to develop a model of career changes for workers employed in jobs with limited tenure and to implement it in the form of an information- and communication technology-based tool. Possible applications range from individual career planning, through institutionalized vocational reintegration, to personnel development in small and medium-sized enterprises.

A Contribution to the Empirics of Reservation Wages

This paper provides evidence on the behavior of reservation wages over the spell of unemployment, using high-frequency longitudinal data on unemployed workers in New Jersey. In comparison to a calibrated job search model, the reservation wage starts out too high and declines too slowly, on average, suggesting that many workers persistently misjudge their prospects or anchor their reservation wage on their previous wage. The longitudinal nature of the data also allows for testing the relationship between job acceptance and the reservation wage, where the reservation wage is measured from a previous interview to avoid bias due to cognitive dissonance. (JEL J22, J31, J64)

Unemployment benefits and unemployment

All developed economies have unemployment benefit programs to protect workers against major income losses during spells of unemployment. By enabling unemployed workers to meet basic consumption needs, the programs protect workers from having to sell their assets or accept jobs below their qualifications. The programs also help stabilize the economy during recessions. If benefits are too generous, however, the programs can lengthen unemployment and raise the unemployment rate. The policy challenge is to protect workers while minimizing undesirable side effects.

Fertility Choice in a Life Cycle Model with Idiosyncratic Uninsurable Earnings Risk

This paper studies the link between rising income uncertainty and household fertility patterns in an Aiyagari-Bewley-Huggett framework augmented to include fertility decisions and infertility risk. Building on Becker and Tomes (1976), I model fertility decisions as sequential, irreversible choices over the number of children, accompanied by parental choices of time and money invested toward improving children's quality. The calibrated model is used to quantify the contribution of earnings uncertainty to the changes in the key fertility indicators between steady states. I show that realistic increases in uninsurable earnings risk lead to a postponement in births by young households, and are associated with a decline in the total number of births. The linkage between earnings risk and fertility patterns highlights the important role that labor market conditions can play in determining both short-term cyclical fluctuations in fertility (such as those in the recent U.S. data) and longer-term demographic trends (such as persistently depressed fertility rates in Southern Europe where youth unemployment rates are high and unemployment spell are very persistent).

Long-term Unemployment Spells and Exit States of Men in Romania and Hungary

This paper present first empirical analysis of long-term unemployment spells and exit states of Romanian and Hungarian men. We analyze the effect of various individual characteristics on men long-term unemployment spells and exit states using two micro-datasets obtained from National Agency of Employment Romania and from Institute of Economics, HungarianAcademy of Science. Cox proportional hazard model with three competing-risks is estimated for Romania; for Hungary with have a four competing-risks specification.

What Now? Addressing the Burden of Canada's Slow-Growth Recovery

The Canadian economy faces serious short-term macroeconomic challenges, the most important of which is addressing the burden of our slow-growth recovery. The sources and consequences of this slow growth are the focus of this Commentary. Canadian monetary policy has little ability to further stimulate Canadian growth. Given the large amount of uncertainty now faced by Canadian firms, further reductions in the policy interest rate are unlikely to be effective in stimulating aggregate demand. In addition, the ongoing problems associated with very low interest rates cannot be ignored and may soon present the Bank of Canada with a compelling case for rate increases. Canadian fiscal authorities have more room to manoeuvre than their counterparts in many other developed countries. Yet there remain solid arguments for budgets to be brought back to balance in the next few years. One is that discretionary fiscal policy is an ineffective pro-growth policy when the economy is not experiencing a sudden collapse of aggregate demand. Another is the longer-term budgetary challenges that Canadian governments will face over the next few decades as a result of population aging. Neither fiscal nor monetary policy is therefore likely to stimulate Canada’s economic growth over the next few years. This lack of stimulus from traditional macroeconomic policy suggests that any pick-up in Canadian growth will rely on a recovery of private demand. Given the lingering uncertainty and the continued slow pace of the global economic recovery, however, a significant rebound in Canadian private demand is unlikely in the near future. High household debt suggests that consumption is an improbable source of near-term growth. An investment revival will require a return of corporate confidence, while a rally in Canadian exports will depend on a strong and sustained foreign recovery. A central conclusion of this Commentary is therefore that Canadian policymakers should accept the continuation of Canada’s slow-growth recovery for the next few years. Slow growth has undesirable consequences, however, including longer unemployment spells, more part-time employment, and a greater incidence of long-term unemployment. Policymakers should focus on addressing the associated burden by enhancing income support for the unemployed, increasing the mobility of workers and improving incentives for labour-market training.

Unemployment Insurance and Underemployment

Should unemployment insurance (UI) systems provide coverage for underemployed job seekers? Based on a statistical analysis of Norwegian unemployment spells, we conclude that the answer to this question is yes. Allowing insured job seekers to retain partial UI benefits during periods of insufficient part-time work not only reduces UI expenditures during the part-time work period; it also unambiguously reduces the time until a regular self-supporting job is found. Probable explanations are that even small temporary part-time jobs provide access to useful vacancy-information and that such jobs are used by employers as a screening device when hiring from the unemployment pool.

Matthew Runs Amok: The Belgian Service Voucher Scheme

In response to structurally poor job prospects for the least skilled, a number of European countries have introduced measures to boost domestic services employment. No country has done so with more fervor than Belgium. Belgian consumers can use the so-called Service Vouchers to pay for a limited but high volume range of domestic services like cleaning, washing and ironing. It is probably the most heavily subsidized scheme of its kind in Europe – more than 70 per cent of the cost of services rendered to individual consumers is borne by the state. Not surprisingly, the scheme has proved tremendously popular. This contribution argues that the scheme is facing a number of particular problems and challenges. While initially many of the people employed under the scheme had experienced past unemployment spells, new recruitment has increasingly drawn on the ranks of those already in work. Furthermore, entrapment in service voucher jobs is rife, going against the purported objective of the scheme in offering a stepping stone to the regular market. Another worrying aspect is that there is some evidence of partial displacement of regular skilled workers. The principal winners are the generally highly educated, relatively well-earning service voucher users who can now outsource domestic chores at a bargain price in the regular market, gaining leisure and care time as well as getting in return more trustworthy, reliable and better quality services than would otherwise be obtainable.

The Effect of Unemployment Duration on Future Earnings and Other Outcomes

One of the distinguishing features of the Great Recession and its aftermath has been the spike in the number of individuals experiencing long-duration unemployment spells, defined as lasting more than 26 weeks. This paper analyzes the effect of unemployment duration on individual's future earnings and other outcomes, such as homeownership and wealth, using data from the Panel Study of Income Dynamics (PSID). The results show a negative relationship between a worker's most recent unemployment spell and his or her current earnings. The earnings of displaced workers do not catch up to those of their nondisplaced counterparts for nearly 20 years. The effect of unemployment on earnings is even more substantial for workers unemployed 26 weeks or more. Unemployment spells also negatively impact future homeownership — this finding suggests that the consequences of the recent spike in unemployment duration could affect more than individuals' expected lifetime earnings. Given the costs of long-term unemployment, policies aimed at reducing the unemployment rate — such as the Federal Reserve's quantitative easing program — could have the added benefit of limiting the negative consequences of long-duration unemployment through fostering faster re-employment.

Forecasting life and career satisfaction in midlife from young adult depressive symptoms

This 14-year, six-wave longitudinal study of 583 university graduates examined whether trajectories of depressive symptoms from age 23 to 30 predicted life and career satisfaction outcomes at age 37, after controlling for (a) time-varying associations of marriage and unemployment with depressive symptoms, (b) sociodemographic characteristics (age, sex, parents' education), and (c) family and labor market experiences assessed at age 37 (marriage and divorce, raising children, income, spells of unemployment, occupational status). Net of the effects of all covariates, lower depressive symptoms at age 23 predicted higher life and career satisfaction at age 37, and steeper declines in depressive symptoms predicted higher life satisfaction. From age 23 to 30, being married was associated with fewer depressive symptoms, and more unemployment (in months) was associated with more depressive symptoms. The course of depressive symptoms through young adulthood carries over into midlife, showing continuity even after accounting for family and labor market experiences.

The effect of leaving employment on mental health: testing ‘adaptation’ versus ‘sensitisation’ in a cohort of working-age Australians

ObjectivesTo investigate the ‘adaptation’ versus ‘sensitisation’ hypotheses in relation to mental health and labour market transitions out of employment to determine whether mental health stabilised (adaptation) or worsened (sensitisation) as...

Micro-Econometric Analyses of Some Welfare Effects of Oil-Availability in the Niger Delta Region of Nigeria

This article raises some fundamental issues in the resource-development literature, such as the effect of resource-availability and resource-related conflicts on personal and community-wide welfare, the interaction between resource-abundance and hopelessness, and the role of government presence and location of communities, using the Niger Delta region of Nigeria as a case study. Employing survey data from two sources, it shows that oil-availability has mixed effects for individuals and communities. It raises educational attainments and socio-economic access among individuals and infrastructural development in communities but also tends to generate higher episodes of violent conflicts, higher inequality, and greater feeling of despondency among individuals. It also fails to significantly affect earning levels or reduce unemployment. Government presence is beneficial as it tends to impact positively on earnings and socio-economic access among residents and reduces the likelihood of being unemployed or experiencing a longer spell of unemployment, but it is also likely to be associated with higher inequalities, higher incidences of conflict, and greater hopelessness. Individuals in more distant communities tend to have lower educational attainments and socio-economic access but they are also more likely to enjoy lower levels of inequality, greater hope, and lower incidences of unemployment. Youths tend to suffer the most from the negative effects of resource-abundance as they appear to be worse off on all measures of personal welfare employed, while geographical characteristics seem important for welfare just the same way as policy and initiatives at the local level. The paper concludes that natural resources, such as oil, can be significantly welfare-improving if its tendency to encourage violent conflict outbreaks can be addressed, but this may not be achieved by merely providing greater infrastructure or expanding educational opportunities but by matching these with significantly-expanded economic space.

Distribution of Unemployment Spells and Survival Analysis: The Case of Bosnia and Herzegovina

It is not enough to study the labour market only by analysing the static variables like rates of employment and unemployment. For the decision making on the labour market it is essential to see the movement of people into and out of jobs, the extent to which they can or cannot quickly find alternative employment and to which extent different groups of the labour force are more affected than others. Using the frailty models, as a specific area in survival analysis, we show that the durations of unemployment are sensitive to the educational level and gender. First, females are experiencing significantly longer durations of finding job than man. Second, better-educated individuals appear to find job more quickly than the less-educated. Finally, there is evidence of duration dependence in unemployment in Bosnia and Herzegovina. The re-employment hazard exhibits positive duration dependence in the first 59 months, and then declines approximately 60 months.