State dependence in unemployment

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

This study examines the extent state dependence among unemployed immigrants in a dynamic discrete choice framework. Three alternative methodologies are employed to control for the problem of the initial condition. The empirical findings show that there is a considerable correlation between the unobserved individual heterogeneity and the initial condition and that the degree of state dependence is overstated if we do not address this problem. The results show that an individual who was unemployed at period “t-1” has 6.5 percentage points higher probability of being unemployed again at period t compared to an individual who was employed at period “t-1”.

Original languageEnglish
Pages (from-to)93-106
Number of pages14
JournalInternational Journal of Economics and Financial Issues
Volume4
Issue number1
Publication statusPublished - 2014

    Fingerprint

Keywords

  • Dynamic random effects models
  • Immigrants
  • State dependence
  • Unemployment
  • Unobserved heterogeneity

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

Cite this