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The Duration and Outcome of Unemployment Spells- The role of Economic Incentives

Author

Listed:
  • Røed, Knut

    (The Ragnar Frisch Centre for Economic Research)

  • Zhang, Tao

    (Dept. of Economics, University of Oslo)

Abstract

We investigate how transitions from unemployment are affected by economic incentives and spell duration. Based on unique Norwegian register data that exhibit the rarity of random-assignment-like variation in economic incentives, the causal parameters are identified without reliance on distributional assumptions or functional form restrictions. We find that the hazard rates are negatively affected by the replacement ratio, but that the size of these effects varies considerably among individuals. There is strong negative duration dependence in the employment hazard and positive duration dependence in the ‘discouragement’ hazard. The employment hazard rises substantially in the months just prior to benefit exhaustion.

Suggested Citation

  • Røed, Knut & Zhang, Tao, 2003. "The Duration and Outcome of Unemployment Spells- The role of Economic Incentives," Memorandum 06/2002, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2002_006
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Competing risks; unemployment duration; random assignment;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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