published in: Journal of Econometrics, 2006, 133 (1), 307-341
This paper proposes 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-ofmoments-
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
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 for the short-term unemployed compared to the
long-term unemployed becomes significantly higher in the 1990s.
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