Exits from unemployment: Recall or new job

Abstract

This paper studies transitions out of unemployment in Spain distinguishing between recall to the same employer and reemployment in a new job. We use a large sample of newly unemployed workers obtained from Social Security records for Spain. These data contain information about each individual's employer identity before and after the unemployment spell. A discrete-time duration model with competing risks of exits serves us to investigate the factors that influence the probabilities of leaving unemployment to return to the same employer or to find a new job with a different employer. We find that the route to exit unemployment is determinant to understand the influence of individual and job characteristics on the hazard rate, as well as the latter dependence on unemployment duration. The recall hazard rate exhibits positive duration dependence during the first months and negative duration dependence thereafter (it is larger for females), while the new-job hazard presents positive duration dependence (it is larger for males). JEL Classification Numbers: J21, J24.

Recall and Unemployment

“…On the empirical side of macroeconomic investigation, Shimer (2012) examines the "heterogeneity hypothesis" to explain the strong cyclical volatility of the overall approach is taken by Jansson (2002) and Alba-Ramirez, Arranz, and Muñoz-Bullón (2007) for Sweden and Spain, respectively. Recalls amount to 45 percent of all completed unemployment spells in Sweden and one-third of all hires in Spain, and only recalls exhibit negative duration dependence of unemployment.…”

Are unemployment benefits harmful to the stability of working careers? The case of Spain

“…Arranz and Muro (2004) show that, for UI recipients, the hazard rate rises dramatically −170 % two months prior to exhaustion-, when UI benefits lapse approaches. Alba-Ramirez et al (2007) investigate benefit recipients' exits from unemployment but they do not analyse the probability of exiting unemployment near the time that benefits expire. More recently, Rebollo-Sanz (2012) differentiates between recalls and entry into new jobs and get that the spike in the unemployment hazard rate at benefit exhaustion differs between recalls and new job entries.…”

The Influence of Temporary Employment on Unemployment Exits in a Competing Risks Framework

“…Finally, Section 5 (Conclusions) summarises the main findings and offers some conclusions. 4 This sort of analysis, while not yet commonplace in the duration literature, is becoming more familiar (see Addison and Portugal 2003, D'Addio and Rosholm 2005, and Alba-Ramírez et al 2007. In fact, Addison and Portugal (2003) examine the determinants of unemployment duration in a competing risks framework with two destination states (inactivity and employment), D' Addio and Rosholm (2005) use the competing risks duration model to study transitions out of temporary jobs to permanent employment and non-employment, and Alba-Ramírez et al (2007) use the same model to analyse two alternative ways of becoming employed (recall by the previous employer and reemployment in a new job).…”