Full Citation

Title: Decomposing duration dependence: Skill depreciation vs. statistical discrimination

Citation Type: Working Paper

Publication Year: 2020

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Abstract: This paper develops a random matching model with unobserved worker heterogeneity and learning about worker types from unemployment duration. The model features negative duration dependence that stems from unobserved heterogeneity as well as statistical discrimination and skill depreciation. We estimate our model using micro-level data from Current Population Survey (CPS) and we decompose the contribution of each channel to job finding rates by duration. We find that shutting down statistical discrimination substantially increases the job finding rates of the long-term unemployed while skill depreciation mainly affects the medium-term unemployed.

Url: https://ink.library.smu.edu.sg/soe_research/2514/

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Authors: Baydur, Ismail; Xu, Jianhuan

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Publication Number: 12-2020

Institution: Singapore Management University

Pages: 1-37

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Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure

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