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Do the rich stay unemployed longer? An empirical study for the U.K

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  • Stancanelli, E.G.F.

Abstract

This paper investigates the impact of individual asset holdings on the probability of leaving unemployment. According to the theory, higher levels of financial wealth will result in higher reservation wages and longer unemployment durations. I estimate the impact of financial assets on the hazard rate, using data for Great Britain. The empirical findings indicate that individual asset holdings affect significantly the escape rate out of unemployment. In particular, negative (positive) levels of wealth increase (reduce) the hazard of leaving unemployment. The size of the impact is, however, rather small. Increasing by 100% the level of wealth of a representative individual, with net wealth and other individual characteristics equal to the sample mean, increases the duration of the unemployment spell by half a week.
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  • Stancanelli, E.G.F., 1997. "Do the rich stay unemployed longer? An empirical study for the U.K," Discussion Paper 97.81, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:7d49af89-0cc0-418e-85c7-7c91c7fc7275
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    References listed on IDEAS

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    1. Arulampalam, Wiji & Stewart, Mark B, 1995. "The Determinants of Individual Unemployment Durations in an Era of High Unemployment," Economic Journal, Royal Economic Society, vol. 105(429), pages 321-332, March.
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    More about this item

    Keywords

    unemployment; duration analysis; labour economics;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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