Publication Type
Journal Article
Version
acceptedVersion
Publication Date
1-2024
Abstract
This article develops a job-search model with unobserved worker heterogeneity and learning about worker types from unemployment duration. The model features negative duration dependence that stems from unobserved heterogeneity, skill depreciation, and statistical discrimination. We estimate job-finding rates implied by our model using microlevel data from the Current Population Survey. We find that removing interview costs counterfactually, thereby eliminating statistical discrimination, substantially increases the job-finding rates of the long-term unemployed. The performance of low-skill workers at the interview stage with discriminating firms plays a key role in explaining our counterfactual result.
Keywords
unemployment duration dependence, skill depreciation, statistical discrimination
Discipline
Behavioral Economics | Economics
Research Areas
Applied Microeconomics
Publication
International Economic Review
Volume
65
Issue
3
First Page
1
Last Page
30
ISSN
0020-6598
Identifier
10.1111/iere.12696
Publisher
Wiley
Citation
BAYDUR, Ismail and XU, Jianhuan.
Statistical discrimination and duration dependence in a semistructural model. (2024). International Economic Review. 65, (3), 1-30.
Available at: https://ink.library.smu.edu.sg/soe_research/2758
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1111/iere.12696