Publication Type
Working Paper
Version
publishedVersion
Publication Date
12-2020
Abstract
This paper develops a random matching model with unobserved worker heterogeneity and learning about worker types from unemployment duration. The model features negative duration dependence that stems from unobserved heterogeneity as well as statistical discrimination and skill depreciation. We estimate our model using micro-level data from Current Population Survey (CPS) and we decompose the contribution of each channel to job finding rates by duration. We find that shutting down statistical discrimination substantially increases the job finding rates of the long-term unemployed while skill depreciation mainly affects the medium-term unemployed.
Keywords
unemployment duration dependence, skill depreciation, statistical discrimination
Discipline
Behavioral Economics | Economics
Research Areas
Applied Microeconomics
First Page
1
Last Page
37
Publisher
American Economic Association
Citation
BAYDUR, Ismail and XU, Jianhuan.
Decomposing duration dependence: Skill depreciation vs. statistical discrimination. (2020). 1-37.
Available at: https://ink.library.smu.edu.sg/soe_research/2514
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.