Long-term unemployment and labour force participation: a decomposition of unemployment to test for the discouragement and added worker hypotheses

C-Tier
Journal: Applied Economics
Year: 2017
Volume: 49
Issue: 60
Pages: 5971-5982

Authors (2)

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We sharpen tests for ‘discouragement’ and ‘added worker’ effects by splitting the explanatory variable – the unemployment rate – into a short-term component and a long-term component. While short-term unemployment (STU) might not result in additional workers on a large scale, long-term unemployment (LTU) reduces household income more, increasing the need for additional income. On the other hand, it may discourage older workers for psychological and sociological reasons. Applying our model to the German labour market, these hypotheses could be confirmed. Even for men, about whom only a few empirical studies on this issue are available, distinguishing between STU and LTU reveals added worker as well as discouragement effects.

Technical Details

RePEc Handle
repec:taf:applec:v:49:y:2017:i:60:p:5971-5982
Journal Field
General
Author Count
2
Added to Database
2026-01-29