Business Cycles and Compositional Variation in U.S. Unemployment

Abbring, Jaap H.; van den Berg, Gerard J.; van Ours, Jan C.

doi:10.2139/ssrn.171435

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Business Cycles and Compositional Variation in U.S. Unemployment

Tinbergen Institute Working Paper No. 97-050/3

53 Pages Posted: 16 Dec 1999

See all articles by Jaap H. Abbring

Jaap H. Abbring

Tilburg University - Department of Econometrics & Operations Research; Tilburg University - Center for Economic Research (CentER); Tinbergen Institute; IZA Institute of Labor Economics

Gerard J. van den Berg

University of Groningen; VU University Amsterdam - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Tinbergen Institute

Jan C. van Ours

Tilburg University - Department of Economics; University of Melbourne - Department of Economics

Date Written: July 16, 1999

Abstract

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.

JEL Classification: C41, E32, J64

Suggested Citation: Suggested Citation

Abbring, Jaap H. and van den Berg, Gerard J. and van Ours, Jan C., Business Cycles and Compositional Variation in U.S. Unemployment (July 16, 1999). Tinbergen Institute Working Paper No. 97-050/3, Available at SSRN: https://ssrn.com/abstract=171435 or http://dx.doi.org/10.2139/ssrn.171435