Do the Rich Stay Unemployed Longer? An Empirical Study for the UK

Elena Stancanelli (elena.stancanelli@psemail.eu)
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Elena Stancanelli: THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, IZA - Institute for the Study of Labor - Institute for the Study of Labor

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Abstract: This paper investigates the impact of individual asset holdings on the probability of leaving unemployment. According to the theory, higher levels of financial wealth will result in higher reservation wages and longer unemployment durations. I estimate the impact of financial assets on the hazard rate, using data for Great Britain. The empirical findings indicate that individual asset holdings affect significantly the escape rate out of unemployment. In particular, negative (positive) levels of wealth increase (reduce) the hazard of leaving unemployment. The size of the impact is, however, rather small. Increasing by 100% the level of wealth of a representative individual, with net wealth and other individual characteristics equal to the sample mean, increases the duration of the unemployment spell by half a week.

Date: 1999-08
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Citations: View citations in EconPapers (16)

Published in Oxford Bulletin of Economics and Statistics, 1999, 61 (3), pp.295 - 314. ⟨10.1111/1468-0084.00131⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03417570

DOI: 10.1111/1468-0084.00131

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