Unemployment, Participation and Worker Flows over the Life-Cycle

Se Kyu Choi, Benjamin Villena-Roldan, Alexandre Janiak

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

9 Citations (Scopus)

Abstract

We estimate life-cycle transition probabilities among employment, unemployment and inactivity for U.S. workers. We assess the importance of each worker flow to account for participation and unemployment rates over the life-cycle. We find that inactivity exit and entry matter, but the empirically relevant margins defy conventional wisdom: high youth unemployment is due to high employment exit probabilities, while low labour force entry probabilities substantially account for low participation and unemployment among older workers. Our results remain intact under several forms of heterogeneity, time-aggregation bias, and misclassification errors.
Original languageEnglish
Pages (from-to)1705-1733
JournalEconomic Journal
Volume125
Issue number589
DOIs
Publication statusPublished - Dec 2015

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