Title

Estimating the Probability of Leaving Unemployment Using Uncompleted Spells from Repeated Cross-section Data

Author(s)

Maia Guell Maia Guell (Universitat Pompeu Fabra and CEP (LSE), CEPR and IZA)

Luojia Hu Luojia Hu (Northwestern University)

Abstract

We propose a new econometric estimation method for analyzing the probability of leaving unemployment using uncompleted spells from repeated cross-section data, which can be especially useful when panel data are not available. The proposed method-of-moments-based estimator has two important features: (1) it estimates the exit probability at the individual level and (2) it does not rely on the stationarity assumption of the inflow composition. We illustrate and gauge the performance of the proposed estimator using the Spanish Labor Force Survey data, and analyze the changes in distribution of unemployment between the 1980s and 1990s during a period of labor market reform. We find that the relative probability of leaving unemployment of the short-term unemployed versus the long-term unemployed becomes significantly higher in the 1990s.

Creation Date

2003-05

Section URL ID

IRS

Paper Number

475

URL

https://dataspace.princeton.edu/bitstream/88435/dsp019p290934d/1/475.pdf

File Function

Jel

P40, P41

Keyword(s)

repeated cross-section data; GMM; duration analysis; unemployment

Suppress

false

Series

1