Differences in characteristics between unemployed with different spells of unemployment.

Abstract

The causes of differences in the duration of unemployment can be grouped into two categories: the personal characteristics of the unemployed and the structure of the regional economy. In the recent literature the personal characteristics age, education, family status, sex, work-experi¬ ence, and unemployment benefits to income ratio are mentioned as the most important personal characteristics of the unemployed. The demand for labor is considered to be the relevant aspect of the regional economy. To find out whether the group of personal characteristics or the regional structure is the most important determinant of unemployment duration, the 1979 Labor Force Survey for the Netherlands is analyzed. The relevance of the variables for the Dutch situation is critically discussed and a theoretical model is constructed and empirically verified. Possible problems with regard to "data-mining” are taken into account by means of cross-validation. The results indicate that longer spells of unemployment depend mostly on per¬ sonal characteristics and that the structure of the regional economy is of minor importance. Finally, some policy recommendations are formulated. # We gratefully acknowledge to Joost Veenstra for research assistance and to Jules Theeuwes and an anonymous referee for valuable remarks.