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A Note on Estimating Unemployment Duration
Author(s) -
Trivedi P. K.
Publication year - 1985
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/j.1467-8462.1985.tb00478.x
Subject(s) - unemployment , estimator , duration (music) , econometrics , parametric statistics , estimation , spell , statistics , parametric model , mathematics , economics , sociology , art , literature , management , anthropology , economic growth
A focal point of a number of recent studies of unemployment duration has been the estimation of the unobserved average completed duration (ACD) of an unemployment spell using groped data on observed incomplete spells. Both parametric and non‐parametric methods are available. This note compares the assumptions underlying the two approaches and argues for the use of a non‐parametric estimator, specifically the Kaplan‐Meier estimator, on grounds of its use of the weaker assumptions. In an actual application of the Kaplan‐Meier estimator to some data from the Australian Labour Force Survey a Number of problems are experienced due to the fact that the estimator is intended for data in a life table format. The note briefly discusses the resolution of these problems and related statistical issues.