The search for success: do the unemployed find stable employment?

Abstract

This paper uses an independent competing risks framework to model job tenure, with previous labour market status and the duration of the preceding unemployment spell as explanatory variables. We find that jobs that follow an unemployment spell have shorter mean duration than other jobs. Less than one half of jobs that follow unemployment last for twelve months. Multivariate results suggest that an unemployment spell has a severe penalty on subsequent job tenure. However, men and women who spend more time unemployed and searching for work are rewarded with a better worker-firm match in their subsequent job.