Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20705
Authors: 
Frijters, Paul
van der Klaauw, Bas
Year of Publication: 
2004
Series/Report no.: 
IZA Discussion paper series 1407
Abstract: 
In a non-stationary job search model we allow unemployed workers to have a permanent option to leave the labor force. Transitions into nonparticipation occur when reservation wages drop below the utility of being nonparticipant. Taking account of these transitions allows the identification of duration dependence in the job offer arrival rate and the wage offer distribution. We estimate the structural model with individual data from the German Socio- Economic Panel and use simulated maximum likelihood. The results show that the presence of significant negative duration dependence in the wage offer distribution causes reservation wages to decrease. The rate at which job offers arrive is constant over the unemployment duration. These findings provide micro evidence that the job search environment of unemployed workers is non-stationary because of loss of skills.
Subjects: 
endogenous nonparticipation
non-stationary job search
duration
JEL: 
J41
J24
J68
J64
C15
Document Type: 
Working Paper

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