Why Did the Average Duration of Unemployment Become So Much Longer?
Toshihiko Mukoyama () and
Aysegul Sahin ()
No 4002, Working Papers from Concordia University, Department of Economics
This paper examines the causes of the observed increase in the average unemployment duration over the past thirty years. First we analyze if changes in the demographic com- position of the U.S. labor force can explain this increase. In particular, we examine how much of the observed change can be explained by the change in age and gender compo- sition. We then consider institutional changes, such as the change in the generosity and coverage of unemployment insurance. Changes in the composition of the labor force and institutional changes can only partially account for the observed increase in the duration of unemployment. We construct a job search model and calibrate it to the U.S. data. The results indicate that more than 70% of the increase in the duration of unemployment over the last thirty years can be explained by an increase in within-group wage inequality.
Keywords: Unemployment Duration; Demographic Change; Within-Group Wage In-equality; Job Search Model (search for similar items in EconPapers)
JEL-codes: E24 J64 E24 J64 (search for similar items in EconPapers)
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Journal Article: Why did the average duration of unemployment become so much longer? (2009)
Working Paper: Why did the average duration of unemployment become so much longer? (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:crd:wpaper:04002
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