The anatomy of unemployment dynamics

Jaap H. Abbring*, Gerard J. van den Berg, Jan C. van Ours

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)peer-review

14 Citations (Scopus)

Abstract

This paper examines the relation between individual unemployment durations and incidence (inflow size) on the one hand and the time-varying macroeconomic conditions in the economy on the other. We develop a model for the analysis of aggregate unemployment incidence and duration data and estimate this model on quarterly French data over the period 1982-1994 stratified by sex. We find upward trends in both incidence and durations. The former is relatively important for females, the latter for males. Male incidence and durations are countercyclical, with only a minor role for cohort effects on durations. In contrast, female cohorts entering at the top of the cycle have relatively short unemployment spells and the female incidence is, if anything, procyclical. There is strong seasonal variation, in particular in the incidence. Finally, we find relatively small non-monotonic individual duration dependence in the first six quarters of unemployment. Unobserved heterogeneity explains the observed negative duration dependence at these durations. We provide some evidence that negative individual duration dependence, and not heterogeneity, is important at higher durations.

Original languageEnglish
Pages (from-to)1785-1824
Number of pages40
JournalEuropean Economic Review
Volume46
Issue number10
DOIs
Publication statusPublished - Dec 2002

Keywords

  • Business cycle
  • Duration dependence
  • Seasonality
  • Unemployment
  • Unemployment duration

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