Business Cycles and Compositional Variation in U.S. Unemployment
Jaap H. Abbring
Tilburg University - Department of Econometrics & Operations Research; Tilburg University - Center for Economic Research (CentER); Tinbergen Institute; Institute for the Study of Labor (IZA)
Gerard J. Van den Berg
VU University Amsterdam - Department of Economics; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA); Tinbergen Institute
Jan C. Van Ours
Tilburg University - Department of Economics; University of Melbourne - Department of Economics
July 16, 1999
Tinbergen Institute Working Paper No. 97-050/3
In this paper, we study U.S. unemployment dynamics using grouped unemployment data from the Current Population Survey over the period 1968-1992. We estimate a model that traces variation in these unemployment data, both over time and between demographic groups, back to the underlying variation in the inflow and the outflow. In turn, we model the outflow as a transition process in which we allow the exit probabilities to depend on calendar time, duration, and demographic group. We particularly focus on the measurement and economic interpretation of the interaction of duration dependence of exit probabilities and the business cycle.
Number of Pages in PDF File: 53
JEL Classification: C41, E32, J64
Date posted: December 16, 1999
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