published in: Journal of Applied Econometrics, 2005, 20 (1), 1-23
On the basis of aggregate data for the early nineties, we analyse the determinants of
unemployment duration for laid-off male workers in Wallonia (Belgium). Our results
demonstrate that if ranking in recruitment occurs, the standard Mixed Proportional Hazard
specification can be too restrictive, leading to an overstatement of the extent of true negative
duration dependence. We conclude that negative duration dependence is largely spurious.
We also decompose the time variation of the hazard in (unobserved) compositional and
direct cyclical and seasonal effects. We find counter-cyclical variation in the quality of young
workers, but none for the prime aged.
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