Heterogeneity and Unemployment Dynamics

Hie Ahn () and James Hamilton

Working Papers from eSocialSciences

Abstract: This paper develops new estimates of flows into and out of unemployment that allow for unobserved heterogeneity across workers as well as direct effects of unemployment duration on unemployment-exit probabilities. Unlike any previous paper in this literature, it develops a complete dynamic statistical model that allows us to measure the contribution of different shocks to the short-run, medium-run, and long run variance of unemployment as well as to specific historical episodes. This paper finds that changes in the inflows of newly unemployed are the key driver of economic recessions and identify an increase in permanent job loss as the most important factor. [Working Paper 22451]

Keywords: unemployment; unobserved heterogeneity; dynamic statistical model; economic recessions (search for similar items in EconPapers)
Date: 2016-07
Note: Institutional Papers
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Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Heterogeneity and Unemployment Dynamics (2016)
Working Paper: Heterogeneity and Unemployment Dynamics (2016)
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