State Dependence in Unemployment

Nisar Ahmad

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    Abstrakt

    This study examines the extent state dependence among unemployed immigrants in a dynamic discrete choice framework. Three alternative methodologies are employed to control for the problem of the initial condition. The empirical findings show that there is a considerable correlation between the unobserved individual heterogeneity and the initial condition and that the degree of state dependence is overstated if we do not address this problem. The results show that an individual who was unemployed at period “t-1” has 6.5 percentage points higher probability of being unemployed again at period t compared to an individual who was employed at period “t-1”.

    OriginalsprogEngelsk
    TidsskriftInternational Journal of Economics and Financial Issues
    Vol/bind4
    Udgave nummer1
    Sider (fra-til)93-106
    ISSN2146-4138
    StatusUdgivet - 2014

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