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

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