Wednesday, 18 January 2012

Distribution and determinants of lifetime unemployment

an article by Achim Schmillen (Institute for Employment Research, Nuremberg; Osteuropa-Institut Regensburg; and University of Regensburg, Germany) and Joachim Möller (Institute for Employment Research, Nuremberg; University of Regensburg, Germany and Institute for the Study of Labor, Bonn) published in Labour Economics Volume 19 Issue 1 (January 2012)

Abstract

The empirical literature on unemployment almost exclusively focuses on the duration of distinct unemployment spells. In contrast, we use a unique administrative micro data set for the time span 1975–2004 to investigate individual lifetime unemployment – defined as the cumulative length of all unemployment spells over a 25-year period. This new perspective enables us to answer questions regarding the long-term distribution and determinants of unemployment for birth cohorts 1950–1954.

We show that lifetime unemployment is highly concentrated on a small part of the population. With censored quantile regressions we investigate the long-lasting influence of bad luck early in the professional career. Controlling for individual and firm characteristics we find that choosing at a young age what turns out to be an unfavourable occupation significantly increases the predicted amount of lifetime unemployment.


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