Persistencies in the Labour Market

Paul Frijters, Maarten Lindeboom () and Gerard van den Berg

No 4025, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using longitudinal income-tax registers, we study how past labour market outcomes affect current labour market transition rates. We focus on hysteresis effects of the durations and incidence of previous spells out of work. We estimate flexible multi-state Mixed Proportional Hazard specifications for transition rates between employment, unemployment, and welfare/non-participation. Our main finding is that after longer periods of employment with high income, individuals' transition rates from unemployment to employment increase. Longer periods of non-employment generally decrease future transition rates to work, and sometimes also from work. The quantitative magnitude of persistency and hysteresis effects on inequality is modest.

Keywords: duration analysis; hysteresis; inequality; wages; unemployment; hazard rates; employment; income; work (search for similar items in EconPapers)
JEL-codes: C41 J22 J64 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2009-02
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (5)

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Working Paper: Persistencies in the Labor Market (2000)
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