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Unemployment durations after temporary work: Evidence for Great Britain and Germany

Ronald Dekker

MPRA Paper from University Library of Munich, Germany

Abstract: Unemployment durations are determined by a number of factors. According to mainstream economics theory, unemployment durations are shorter in a more flexible labour market. In this paper, we hypothesize that workers who had a temporary contract before the spell of unemployment will experience shorter spells of unemployment than workers who had a permanent contract before. We adopt a flexible hazard rate model with a nonparametric baseline to analyse data on unemployment spells in Germany and Great Britain for the period 1991-2001. The two datasets allow for an international comparison of the institutional differences between the two countries. We find no evidence of shorter unemployment spells for previous temporary workers neither in Great-Britain nor in Germany. Results suggest that a labour market policy of promoting temporary work will not necessarily lead to lower unemployment since these policies increase the probability of becoming unemployed without being able to fulfil the promise of shorter unemployment spells.

Keywords: unemployment duration; temporary employment; job search model; nonparametric hazard model; Great-Britain; Germany (search for similar items in EconPapers)
JEL-codes: C41 J41 C14 J64 (search for similar items in EconPapers)
Date: 2008-03-01
New Economics Papers: this item is included in nep-eec and nep-lab
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