Long-term unemployment and labor force participation: a decomposition of unemployment to test for the discouragement and added worker hypotheses

Johann Fuchs and Enzo Weber
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Johann Fuchs: Institute for Employment Research (IAB), Nuremberg, Germany

No 201532, IAB-Discussion Paper from Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]

Abstract: "We sharpen tests for 'discouragement' and 'added worker' effects by splitting the explanatory variable - the unemployment rate - into a short-term and a long-term component. While short-term unemployment might not result in additional workers on a large scale, long-term unemployment reduces household income more, increasing the need for additional income. On the other hand, it may discourage older workers for psychological and sociological reasons. Applying our model to the German labor market, these hypotheses could be confirmed. Even for men, about whom only few empirical studies on this issue are available, distinguishing between short-term and long-term unemployment reveals discouragement effects." (Author's abstract, IAB-Doku) ((en))

Keywords: Bundesrepublik Deutschland; Erwerbsbeteiligung; Geschlechterverteilung; kurzfristige Arbeitslosigkeit; Langzeitarbeitslosigkeit; altersspezifische Faktoren; stille Reserve; 1983-2011 (search for similar items in EconPapers)
JEL-codes: C32 E24 J21 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2015
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (2)

Published in/as: Applied Economics, (2017), getr. Sz., doi:10.1080/00036846.2017.1368991

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Journal Article: Long-term unemployment and labour force participation: a decomposition of unemployment to test for the discouragement and added worker hypotheses (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:iab:iabdpa:201532

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