Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/242585 
Year of Publication: 
2020
Series/Report no.: 
Economics Working Paper Series No. 2020/13
Publisher: 
Auckland University of Technology (AUT), Faculty of Business, Economics and Law, Auckland
Abstract: 
Biological processes have provided new insights into diverging labour market trajectories. In this paper, we use population variation in testosterone levels to explain transition probabilities into and out of unemployment. We follow individual employment histories for 1,771 initially employed and 109 initially unemployed British men from the UK Household Longitudinal Study ("Understanding Society") be-tween 2009 and 2015. To account for unobserved heterogeneity, we apply dynamic random effect models. We find that individuals with high testosterone levels are more likely to become unemployed, but they are also more likely to exit unemployment. Based on previous studies and descriptive evidence, we argue that these effects are likely driven by personality traits and occupational sorting of men with high testosterone levels. Our findings suggest that latent biological processes can affect job search behaviour and labour market outcomes, without necessarily relating to illness and disability.
Subjects: 
labour market dynamics
unemployment
testosterone
random-effects probit
JEL: 
I10
J64
C23
Document Type: 
Working Paper

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