Anatomy of Non-Employment Risk

Fugazza Carolina ()
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Fugazza Carolina: Università degli Studi di Torino and CeRP-Collegio Carlo Alberto, ESOMAS, c.so Unione Sovietica 218 bisTorino, Italy

The B.E. Journal of Economic Analysis & Policy, 2019, vol. 19, issue 3, 19

Abstract: This paper investigates how job separation and job-finding probabilities shape the non-employment risk across ages and working group characteristics. Improving on current methods, I estimate duration models for employment and non-employment separately. I then use the results to derive the individual age profiles of conditional transitions in and out of non-employment as well as the unconditional non-employment risk profile over the whole working life. This approach allows me to apply the decomposition of changes in individual non-employment risk. To date, this type of decomposition has only been used to study aggregate non-employment dynamics. I find that differences in job separation rates across ages underlie the observed age differences in non-employment risk. When differences between working groups are under consideration, the job finding probability is just as important as the job separation probability.

Keywords: non-employment risk; duration analysis; heterogeneity; semi-Markov processes (search for similar items in EconPapers)
JEL-codes: C53 E24 J64 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1515/bejeap-2018-0070

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