Re-Employment Probabilities over the Business Cycle

Guido Imbens and Lisa Lynch

No 2167, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using a Cox proportional hazard model that allows for a flexible time dependence in order to incorporate business cycle effects, we analyze the determinants of reemployment probabilities of young workers in the U.S. from 1978-1989. We find considerable changes in the chances of young workers finding jobs over the business cycle despite the fact that personal characteristics of those starting jobless spells do not vary much over time. Therefore, government programs that target specific demographic groups may change individuals’ positions within the queue of job seekers, but may only have a more limited impact on average re-employment probabilities. Living in an area with high local unemployment reduces re-employment chances as does being in a long spell of non-employment. However, the damage associated with being in a long spell seems to be reduced somewhat if a worker is unemployed in an area with high overall unemployment.

Keywords: business cycle; duration dependence; unemployment (search for similar items in EconPapers)
JEL-codes: E24 E32 J2 J6 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2006-06
New Economics Papers: this item is included in nep-bec, nep-lab and nep-mac
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Citations: View citations in EconPapers (38)

Published - published in: Portuguese Economic Journal, 2006, 5 (2), 111-134

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Related works:
Journal Article: Re-employment probabilities over the business cycle (2006)
Working Paper: Re-Employment Probabilities over the Business Cycle (1993)
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