Scarring Effects of Remaining Unemployed for Long-Term Unemployed School-Leavers

Bart Cockx and Matteo Picchio

No 5937, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study investigates whether and to what extent further unemployment experience for youths who are already long-term unemployed imposes a penalty on subsequent labor market outcomes. We propose a flexible method for analyzing the effect on wages aside of transitions from unemployment and employment within a multivariate duration model that controls for selection on observables and unobservables. We find that prolonging unemployment drastically decreases the chances of finding employment, but hardly affects the quality of subsequent employment. The analysis suggests that negative duration dependence in the job finding rate is induced by negative signaling and not by human capital depreciation.

Keywords: employment quality; selectivity; wage in multivariate duration model; scarring effect of unemployment duration (search for similar items in EconPapers)
JEL-codes: C33 C41 J62 J64 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2011-08
New Economics Papers: this item is included in nep-hrm, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published - published in: Journal of the Royal Statistical Society Series A , 2013, 176 (4), 951-980

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https://docs.iza.org/dp5937.pdf (application/pdf)

Related works:
Journal Article: Scarring effects of remaining unemployed for long-term unemployed school-leavers (2013)
Working Paper: Scarring Effects of Remaining Unemployed for Long-Term Unemployed School-Leavers (2011)
Working Paper: Scarring Effects of Remaining Unemployed for Long-Term Unemployed School-Leavers (2011)
Working Paper: Scarring Effects of Remaining Unemployed for Long-Term Unemployed School-Leavers (2011)
Working Paper: Scarring Effects of Remaining Unemployed for Long-Term Unemployed School-Leavers (2011)
Working Paper: Scarring Effects of Remaining Unemployed for Long-Term Unemployed School-Leavers (2011)
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