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SHORT‐AND LONG‐TERM UNEMPLOYMENT. A PARAMETRIC MODEL WITH TIME‐VARYING EFFECTS
Author(s) -
Portugal Pedro,
Addison John T.
Publication year - 1995
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/j.1468-0084.1995.mp57002004.x
Subject(s) - unemployment , econometrics , proportional hazards model , parametric statistics , covariate , hazard , term (time) , parametric model , hazard ratio , duration (music) , mathematics , statistics , economics , confidence interval , physics , chemistry , organic chemistry , quantum mechanics , acoustics , economic growth
In this paper we present the first application to unemployment duration analysis of a mixture distribution model initially proposed in the biosciences literature by Blackstone, Naftel and Turner (1986). The model is characterized by the decomposition of an aggregate hazard function into a number of distinct hazard functions. The approach allows us to attribute to each function a different set of covariates as well as coefficients. Using US data on displaced workers, we are able to decompose the time varying hazard into two distinct phases — corresponding to short‐term and long‐term unemployment — and in the process evaluate (and reject) the proportionality assumption. We also compare the results from the model with those obtained from the Cox proportional hazards model and with a parametric hazards model in which a Burr specification is employed for the baseline hazard.