The Distribution of Unemployment by Age and the Unemployment Rate - A Puzzle?

Carsten Ochsen

No 89, Thuenen-Series of Applied Economic Theory from University of Rostock, Institute of Economics, Germany

Abstract: This paper examines the effects of the distribution of unemployment by age on the level of unemployment. We provide an extension of the standard equilibrium unemployment model that allows for age dependent job finding probabilities and quit rates. In the empirical part of the paper we apply a panel estimator on data for a set of OECD countries to test the implications of the theoretical model. The results provide the somewhat surprising evidence that the distribution of unemployment by age has a hump-shape effect on the unemployment rate.

Keywords: Distribution of Unemployment by Age; Duration of Unemployment (search for similar items in EconPapers)
JEL-codes: J11 J64 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age and nep-lab
Date: 2008
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Persistent link: http://EconPapers.repec.org/RePEc:ros:wpaper:89

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