Al fine di migliorare la tua esperienza di navigazione, questo sito utilizza i cookie di profilazione di terze parti. Chiudendo questo banner o accedendo ad un qualunque elemento sottostante acconsenti all’uso dei cookie.

Unemployment Duration Variance Decomposition à la ABS: Evidence from Spain

25 novembre 2020 ore 12:00 - 13:00

Aula Luiss Research Seminars, Sede di Luiss

Speaker: Maia Guell , The University of Edinburgh

Abstract

In a recent paper, Alvarez, Boroviˇckov ́a, and Shimer (2014) revisit the analysis of thedeterminants of unemployment duration by proposing a new method (the ABS methodhereafter) that directly estimates the importance of each component and implementing itusing precise information on unemployment spells from social security administrative datafor Austria. In this paper, we apply the ABS method to social security administrative datafor Spain with the objective of comparing these two very different labor markets as wellas Spain along the business cycle. Administrative data have many advantages comparedto Labor Force Survey data, but unemployment spells without benefit entitlement areunderreported. The degree and nature of such underreporting are country-specific andare particularly important in Spain. We propose a strategy to account for such spells byusing information from the Spanish LFS data as well as institutional information. We hopethat our approach will provide a useful way to apply the ABS method in other countrieswith similar data. Our findings are as follows: (i) The aggregate component is clearlythe most important one, followed by heterogeneity and duration dependence, which areroughly comparable. (ii) The relative importance of each component and, in particular,duration dependence is quite similar in Austria and Spain, especially when minimizingthe effect of fixed-term contracts in Spain. Similarly, we do not find big differences in therelative contribution of the different components along the business cycle in Spain. (iii)These comparisons suggest that statistical discrimination due to dynamic sample selectiondoes not seem to be the main driver of duration dependence