Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207357 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12531
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Governments are showing an increasing interest in quantitative models that give insights into the determinants of unemployment duration. Yet, these models oftentimes do not explicitly take into account that unemployment prospects are influenced by personality characteristics that are not being fully captured by variables in administrative data. Using German survey data linked with administrative data, we show that numeracy skills are strongly related to unemployment duration, while at the same time we confirm well-established patterns documented in the literature. Low numeracy is strongly related to a longer unemployment duration of workers below median age (33) in our sample, even after including a rich set of controls. We find that unrealistic reservation wages are not the main driver, nor do results seem to be driven by locking-in effects caused by programme participation. On the other hand, the absence of a relationship between numeracy and unemployment duration for older workers might well be driven by a locking-in effect for those with high numeracy, as they tend to commit more often to intensive training programmes. Another tentative explanation, which is supported by the data, is that younger people have fewer signals to send such that their cognitive abilities may have a higher relative signalling value.
Subjects: 
cognitive and noncognitive skills
unemployment duration
numeracy
JEL: 
D04
D61
J64
J68
Document Type: 
Working Paper

Files in This Item:
File
Size
196.69 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.