Scarring Effects of Remaining Unemployed for Long-Term Unemployed School-Leavers

Bart Cockx and Matteo Picchio

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

Abstract: This study investigates whether and to what extent further unemployment experience for youths who are already long-term unemployed imposes a penalty on subsequent labor market outcomes. We propose a flexible method for analyzing the effect on wages aside of transitions from unemployment and employment within a multivariate duration model that controls for selection on observables and unobservables. We find that prolonging unemployment drastically decreases the chances of finding employment, but hardly affects the quality of subsequent employment. The analysis suggests that negative duration dependence in the job finding rate is induced by negative signaling and not by human capital depreciation.

Keywords: scarring effect of unemployment duration; employment quality; wage in multivariate duration model; selectivity. (search for similar items in EconPapers)
JEL-codes: C33 C41 J62 J64 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2011-08
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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http://wps-feb.ugent.be/Papers/wp_11_731.pdf (application/pdf)

Related works:
Journal Article: Scarring effects of remaining unemployed for long-term unemployed school-leavers (2013)
Working Paper: Scarring Effects of Remaining Unemployed for Long-Term Unemployed School-Leavers (2011)
Working Paper: Scarring Effects of Remaining Unemployed for Long-Term Unemployed School-Leavers (2011)
Working Paper: Scarring Effects of Remaining Unemployed for Long-Term Unemployed School-Leavers (2011)
Working Paper: Scarring Effects of Remaining Unemployed for Long-Term Unemployed School-Leavers (2011)
Working Paper: Scarring Effects of Remaining Unemployed for Long-Term Unemployed School-Leavers (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:11/731

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