A Cross-Country Study of Workers' Skills and Unemployment Flows

36 Pages Posted: 24 Jan 2017 Last revised: 4 Sep 2018

See all articles by Damir Stijepic

Damir Stijepic

Johannes Gutenberg University Mainz

Date Written: August 31, 2018

Abstract

In a comparison of 29 countries, I document that formal education (years spent in education), non-cognitive skills (social trust) and cognitive skills (numeracy score) have an unconditional correlation with the log-risk-ratio of exiting to entering unemployment of 0.27, of 0.48 and of 0.70, respectively. The multivariate analysis highlights cognitive skills as the key source of the international differences in unemployment flows. While all three measures of skills together explain 49.0 percent of the variance in the log-risk-ratio across countries, the numeracy score alone already accounts for 48.5 percent of the variance. I provide evidence that the estimated effects of skills on unemployment flows are not due to reverse causality.

Keywords: Gross Worker Flows, Unemployment, Cognitive Skills, Versatility, Education, International Comparisons, Survey of Adult Skills, PIAAC

JEL Classification: J20, J24, J60, J64, I20

Suggested Citation

Stijepic, Damir, A Cross-Country Study of Workers' Skills and Unemployment Flows (August 31, 2018). Available at SSRN: https://ssrn.com/abstract=2903283 or http://dx.doi.org/10.2139/ssrn.2903283

Damir Stijepic (Contact Author)

Johannes Gutenberg University Mainz ( email )

Jakob-Welder-Weg 9
Mainz, 55128
Germany

HOME PAGE: http://www.damir.stijepic.com

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