Temporary Layoffs and the Duration of Unemployment

Authors:

Røed, Knut and Nordberg, Morten

Year:

2003

Reference:

Vol. 10, 381-398

Summary

We use Norwegian micro-data to identify the driving forces behind unemployment spells following temporary- and permanent dismissals. The duration of unemployment spells for permanently dismissed workers is primarily explained by individual resources and eco-nomic incentives, while spell-duration for temporary dismissed workers is explained by firm incentives. Structural duration dependence is non-parametrically identified and sharply estimated with the aid of variation in business cycles and repeated spells. The em-ployment hazards for both spell-types exhibit positive duration dependence during the first months and negative duration dependence thereafter.

JEL:

C41, J64

Keywords:

unemployment duration, unobserved heterogeneity, competing risks

Project:

Oppdragsgiver: AAD
Oppdragsgivers prosjektnr.:
Frisch prosjekt: 1312 - Unemployment transitions

Contact:

knut.roed@frisch.uio.no

Financing:

Arbeids- og administrasjonsdepartementet