RT Journal Article
SR Electronic
T1 Unemployment Duration
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 156
OP 191
DO 10.3368/jhr.38.1.156
VO 38
IS 1
A1 Addison, John T.
A1 Portugal, Pedro
YR 2003
UL http://jhr.uwpress.org/content/38/1/156.abstract
AB This paper examines the determinants of unemployment duration in a competing risks framework with two destination states: inactivity and employment. The innovation is the recognition of defective risks. A polynomial hazard function is used to differentiate between two possible sources of infinite durations. The first is produced by a random process of unlucky draws, the second by workers rejecting a destination state. The evidence favors the mover-stayer model over the search model. Refinement of the former approach, using a more flexible baseline hazard function, produces a robust and more convincing explanation for positive and zero transition rates out of unemployment.