Unemployment Duration Competing and Defective Risks

John Addison and Pedro Portugal ()

Journal of Human Resources, 2003, vol. 38, issue 1

Abstract: This paper examines the determinants of unemployment duration in a competing risks framework with two destination states: inactivity and employment. The innovation is the recognition of defective risks. A polynomial hazard function is used to differentiate between two possible sources of infinite durations. The first is produced by a random process of unlucky draws, the second by workers rejecting a destination state. The evidence favors the mover-stayer model over the search model. Refinement of the former approach, using a more flexible baseline hazard function, produces a robust and more convincing explanation for positive and zero transition rates out of unemployment.

Date: 2003
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Related works:
Working Paper: Unemployment Duration: Competing and Defective Risks (2001)
Working Paper: Unemployment Duration: Competing and Defective Risks (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:uwp:jhriss:v:38:y:2003:i:1:p156-191

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