Why did the average duration of unemployment become so much longer?
There has been a substantial increase in the average duration of unemployment relative to the unemployment rate in the U.S. over the last 30 years. We evaluate the performance of a standard job-search model in explaining this phenomenon. In particular, we examine whether the increase in within-group wage inequality and the decline in the incidence of unemployment can account for the increase in unemployment duration. The results indicate that these two changes can explain a significant part of the increase over the last 30 years, although the model fails to match the behavior of unemployment duration during 1980s.
Year of publication: |
2009
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Authors: | Mukoyama, Toshihiko ; Sahin, Aysegl |
Published in: |
Journal of Monetary Economics. - Elsevier, ISSN 0304-3932. - Vol. 56.2009, 2, p. 200-209
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Publisher: |
Elsevier |
Keywords: | Unemployment duration Wage dispersion Job search model |
Saved in:
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