Unemployment duration, job search and labour market segmentation

Working paper

Although it is a common theoretical assumption that the chances to find a job fall with time in unemployment, this is not systematically confirmed by empirical evidence, and there is no evidence for developing countries. We develop a framework that allows us to test the four major explanations why we may observe non-negative duration dependence while genuine duration dependence is negative: financial support for the unemployed, active labour market policies, a change in the economy over time, and segmentation of the labour market into 'good' and 'bad' jobs. Using data for urban Ethiopia we observe a constant hazard while controlling for unobserved heterogeneity, and find that labour market segmentation is the only convincing explanation.

Authors: Serneels, P

• Alternative title: Evidence from urban Ethiopia
• Publication status: Published
• Peer review status: Not peer reviewed
• Series: CSAE working paper series
• Place of publication: http://www.csae.ox.ac.uk/workingpapers/main-wps.html
• Publication date: 2008-01-01
• Edition: Author's Original
• Language: English
• Keywords: JEL: C41; duration dependence; segmented labour markets; urban labour market; unemployment; JEL: J64
• Subjects: Economics; Labour economics