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The influence of unemployment duration and heterogeneity on the transition from unemployment for Australia youth

The probability of leaving unemployment has traditionally been expected to fall as the duration of the unemployment spell increased. In recent years, however, this view has been challenged by several analysts who argue that evidence of this relationship may derive from not taking account of differences in the characteristics of the unemployed. This paper attempts to ascertain the separate influence of unemployment duration by modelling the probability of leaving unemployment as a function of duration, while controlling for a much wider variety of characteristics than has hitherto been possible. The analysis uses data from the first round of the Australian Longitudinal Survey conducted by the Bureau of Labour Market Research and relates to youth between the ages of 15 and 24. The outcomes suggest that unemployment duration is particularly important in influencing the labour market status of females. The influence of duration appears to be felt on both the demand and supply sides of the market, the latter being exercised through the reservation wage. These results can be broadly interpreted as providing evidence in support of the traditional view of the influence of duration.

The probability of leaving unemployment has traditionally been expected to fall as the duration of the unemployment spell ...  Show Full Abstract  

Authors: Brooks, Clive; Volker, Paul
Corporate authors: Australia. Bureau of Labour Market Research (BLMR)
Date: 1985
Geographic subjects: Oceania; Australia
Resource type: Working paper
Series name: Working paper (Australia. Bureau of Labour Market Research)
Subjects: Youth; Employment; Labour market

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