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In this study the author examines the starting salaries and success in obtaining employment for Australian university graduates of 1980. Show less

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.

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