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Unemployment Duration: Competing and Defective Risks

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  • Pedro Portugal
  • John T. Addison

Abstract

This paper examines the determinants of unemployment duration in the framework of a competing risks model, where the destination states are employment and inactivity. The major innovation is the use of a split-population approach to accommodate the presence of defective risks in the context of the competing risks model. Certain of the regressors that affect the conditional hazards are allowed to influence defective risks. Unobserved individual heterogeneity among the susceptible populations is also controlled for. Access to unemployment benefits and age are accorded special emphasis because of their influence on defective risks and escape rates.

Suggested Citation

  • Pedro Portugal & John T. Addison, 2000. "Unemployment Duration: Competing and Defective Risks," Working Papers w200001, Banco de Portugal, Economics and Research Department.
    • Handle: RePEc:ptu:wpaper:w200001
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    References listed on IDEAS

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    More about this item

    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
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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