Title: Chapter 16 A Structural Nonstationary Model of Job Search: Stigmatization of the Unemployed by Job Offers or Wage Offers?
Abstract: Abstract We develop a structural nonstationary model of job search in the fashion of van den Berg (1990). Nonstationarity comes from duration-dependence in benefits, in the arrival rate of job offers, and in wage offers. The model is then estimated using the French sample of the European Community Household Panel (ECHP) (1994–2000). This data set provides the variables required to identify the model (reservation wages, job offers arrival rate, accepted wages, and rejected wages) and allows reconstructing the “true” monthly sequence of benefits for each unemployed worker. We find that duration-dependence in job offers is quite limited: the arrival rate of job offers is exactly the same after 2 years of unemployment than at the beginning of the spell. Duration-dependence in wage offers is slightly more pronounced: wages are decreasing during the first 2 years of unemployment. Nevertheless, the most important fall is observed at the beginning of the spell. We also find that those formerly employed in temporary jobs are more sensitive to duration than the other unemployed. Then we simulate the effects, on the expected duration of unemployment, of four reforms of the unemployment compensation system: (A) an increase in the amount of UI benefits, keeping unchanged the profile of benefits over the unemployment spell; (B) the replacement of the declining time sequence of insurance benefits by a constant sequence; (C) the reform B combined with the imposition of punitive sanctions; (D) a 3-month increase in the maximum duration of UI entitlement.
Publication Year: 2006
Publication Date: 2006-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
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Cited By Count: 3
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