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Are the Spanish Long-Term Unemployed Unemployable?

Marcel Jansen (), García-Pérez, J. Ignacio and Samuel Bentolila ()
Authors registered in the RePEc Author Service: J. Ignacio García Pérez ()

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: Long-term unemployment reached unprecedented levels in Spain in the wake of the Great Recession and it still affects around 57% of the unemployed. We document the sources that contributed to the rise in long-term unemployment and analyze its persistence using state-ofthe- art duration models. We find pervasive evidence of negative duration dependence, while personal characteristics such as mature age, lack of experience, and entitlement to unemployment benefits are key to understand the cross-sectional differences in the incidence of long-term unemployment. The negative impact of low levels of skills and education is muted by the large share of temporary contracts, but once we restrict attention to employment spells lasting at least one month these factors also contribute to a higher risk of long-term unemployment. Surprisingly, workers from the construction sector do not fare worse than similar workers from other sectors. Finally, self-reported reservation wages are found to respond strongly to the cycle, but much less to individual unemployment duration. In view of these findings, we argue that active labour market policies should play a more prominent role in the fight against long-term unemployment while early activation should be used to curb inflows.

Keywords: Long-term; unemployment; great; recession; duration; model; survival; probability; Spain (search for similar items in EconPapers)
JEL-codes: J63 J64 J65 C41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-eur and nep-lab
Date: 2017-01
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Related works:
Journal Article: Are the Spanish long-term unemployed unemployable? (2017) Downloads
Working Paper: Are the Spanish Long-Term Unemployed Unemployable? (2017) Downloads
Working Paper: Are the Spanish Long-Term Unemployed Unemployable? (2017) Downloads
Working Paper: Are the Spanish Long-Term Unemployed Unemployable? (2017) Downloads
Working Paper: Are the Spanish Long-Term Unemployed Unemployable? (2017) Downloads
Working Paper: Are the Spanish Long-Term Unemployed Unemployable? (2017) Downloads
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