Duration Dependence and Heterogeneity in French Youth Unemployment Durations

This paper investigates the degree to which the individual exit rate out of unemployment for young job seekers changes as a function of the elapsed unemployment duration. We use a nonparametric estimation method for population data on outflows from different duration classes. The method also provides estimates of the amount of unobserved heterogeneity in these data. We explicitly take into account that individual exit rates are affected by the business cycle. The method is applied to population data on young French unemployed job seekers. The results are used for policy recommendations