New Insights on Unemployment Duration and Post Unemployment Earnings in Germany: Censored Box-Cox Quantile Regression at Work

Bernd Fitzenberger and Ralf Wilke

No 2609, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In light of nonstationary search theory (van den Berg, 1990), this paper estimates the effects of benefit entitlement periods and the size of unemployment benefits on unemployment durations and post-unemployment earnings in West Germany. For the unemployment duration, we estimate censored Box-Cox quantile regression, which is robust with respect to the specification of the unobserved error distribution and avoids the common proportional hazard assumption. Our results suggest that the length of benefit entitlement is only of minor importance for the duration of search unemployment and for post unemployment wages. A high wage replacement rate in the low wage sector seems to considerably elongate the duration of unemployment and it is associated with higher post unemployment wages.

Keywords: unemployment; Box Cox quantile regression; hazard rate; wage (search for similar items in EconPapers)
JEL-codes: C13 C14 J64 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2007-02
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (25)

Published - published in: Oxford Bulletin of Economics and Statistics, 2010, 72 (6), 794 - 826

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Working Paper: New insights on unemployment duration and post unemployment earnings in Germany: censored Box-Cox quantile regression at work (2007)
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