Unemployment duration: Competing and defective risks

John T. Addison, Pedro Portugal

Research output: Contribution to journalArticle

23 Citations (Scopus)

Abstract

This paper examines the determinants of unemployment duration in a competing risks framework with two destination states: inactivity and employment. The innovation is the recognition of defective risks. A polynomial hazard function is used to differentiate between two possible sources of infinite durations. The first is produced by a random process of unlucky draws, the second by workers rejecting a destination state. The evidence favors the mover-stayer model over the search model. Refinement of the former approach, using a more flexible baseline hazard function, produces a robust and more convincing explanation for positive and zero transition rates out of unemployment.

Original languageEnglish
Pages (from-to)156-191
Number of pages36
JournalJournal of Human Resources
Volume38
Issue number1
DOIs
Publication statusPublished - 1 Dec 2003

Keywords

  • MODELS
  • insurance
  • spells

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