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Unemployment Persistence

Arulampalam, Wiji and Booth, Alison L and Taylor, Mark P (2000) 'Unemployment Persistence.' Oxford Economic Papers, 52 (1). pp. 24-50. ISSN 0030-7653

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We estimate dynamic panel data models of unemployment incidence for men using the British Household Panel Survey. Econometric issues concerning unobserved individual heterogeneity, genuine state dependence, and the initial conditions problems are addressed in detail. We find strong evidence of state dependence consistent with the scarring theory of unemployment--an individual's previous unemployment experience has implications for his future labour market experience. This suggests that policies reducing short run employment incidence will have longer-run effects by reducing the equilibrium or natural rate of unemployment.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Faculty of Social Sciences > Institute for Social and Economic Research
Depositing User: Jim Jamieson
Date Deposited: 18 Jul 2012 10:52
Last Modified: 17 Jul 2013 16:46

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