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Inflow Composition, Duration Dependence and their Impact on the Unemployment Outflow Rate*
Author(s) -
Turon Hélène
Publication year - 2003
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/1468-0084.00039
Subject(s) - inflow , outflow , duration (music) , business cycle , unemployment , variation (astronomy) , unemployment rate , composition (language) , environmental science , economics , econometrics , mechanics , physics , meteorology , macroeconomics , linguistics , philosophy , astrophysics , acoustics
Abstract This paper presents estimates of the components of the dynamics of the unemployment outflow rate with British data. We allow both the composition of the inflow and individual duration dependence to vary over the business cycle. We find the inflow composition to be strongly countercyclical. Individual exit rates are found to be substatntially more sensitive to the business cycle than previously thought and than the average exit rate fluctuations suggest. Cyclical variations in duration dependence are not significant. With our estimates, fluctuations in the average exit rate out of the first year of unemployment are mainly accounted for by variations of individual exit rates, variation of inflow composition, and variation in the inflow level combined with the duration dependence phenomenon.