The nature of long-term unemployment: predictability, heterogeneity and selection

Andreas I. Mueller and Johannes Spinnewijn

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper studies the predictability of long-term unemployment (LTU) using rich administrative data from Sweden. We establish substantial heterogeneity in LTU risk across individuals, accounting for both observed and unobserved heterogeneity using a wide range of observable predictors and multiple-spell outcomes, respectively. We apply our prediction algorithm to study the dynamics of job finding over the unemployment spell and the business cycle. Selection effects can explain most of the decline in average job finding over the unemployment spell but little of its cyclicality. We also find sizable heterogeneity in the profiles of job finding over the unemployment spell but not over the business cycle.

JEL-codes: C53 J63 J64 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2025-12-31
References: Add references at CitEc
Citations:

Published in Journal of Political Economy, 31, December, 2025, 133(12), pp. 3846 - 3902. ISSN: 0022-3808

Downloads: (external link)
https://researchonline.lse.ac.uk/id/eprint/127550/ Open access version. (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:127550

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().