Duration Dependence in the Exit Rate Out of Unemployment in Belgium: Is it True or Spurious?

30 Pages Posted: 12 Dec 2002

See all articles by Bart Cockx

Bart Cockx

Ghent University - Sherppa - Faculty of Economics and Business Administration; IRES, Université Catholique de Louvain; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)

Muriel Dejemeppe

Catholic University of Louvain - School of Economic and Social Research

Date Written: November 2002

Abstract

On the basis of aggregate data for the early nineties, we analyse the determinants of unemployment duration for laid-off male workers in Wallonia (Belgium). Our results demonstrate that if ranking in recruitment occurs, the standard Mixed Proportional Hazard specification can be too restrictive, leading to an overstatement of the extent of true negative duration dependence. We conclude that negative duration dependence is largely spurious. We also decompose the time variation of the hazard in (unobserved) compositional and direct cyclical and seasonal effects. We find counter-cyclical variation in the quality of young workers, but none for the prime aged.

Keywords: Unemployment Duration, Ranking, Heterogeneity, Business Cycle

JEL Classification: C41, J64

Suggested Citation

Cockx, Bart L. W. and Dejemeppe, Muriel, Duration Dependence in the Exit Rate Out of Unemployment in Belgium: Is it True or Spurious? (November 2002). IZA Discussion Paper No. 632. Available at SSRN: https://ssrn.com/abstract=358220

Bart L. W. Cockx (Contact Author)

Ghent University - Sherppa - Faculty of Economics and Business Administration ( email )

Ghent, B-9000
Belgium

IRES, Université Catholique de Louvain

Place Montesquieu, 3
Louvain-la-Neuve
Belgium

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Muriel Dejemeppe

Catholic University of Louvain - School of Economic and Social Research ( email )

3, Place Montesquieu
1348 Louvain-la-Neuve
Belgium
+32 10 47 41 00 (Phone)
+32 10 47 39 45 (Fax)

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