Unemployment and Spell Duration during the Great Recession in the EU

Working Paper: 12/05 by Carlos Gradín, Olga Cantó and Coral del Río (Universidade de Vigo) published in September 2012

Abstract

The current economic recession has had unequal consequences on employment depending on the country considered. It is generally accepted that the negative impact of unemployment on individual welfare can be very different depending on its duration.

However, conventional statistics on unemployment do not adequately capture to what extent the recession is not only increasing the incidence of unemployment but also its severity in terms of duration in time of ongoing unemployment spells.

In this paper, we follow Shorrocks’s (2009a,b) proposal of a duration-sensitive measure of unemployment in order to analyse the different dynamic characteristics of unemployment in a selected group of European Union countries during the current Great Recession. Our results add some evidence on the relevance of incorporating the duration dimension in measuring unemployment and provide a tool for dynamic analysis based on cross-sectional data.

JEL Classification: D30, D63, I31, J64

Full text (PDF 26pp)

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