Is a Risk Index Approach to Unemployment Possible?

Abstract

This paper examines the ways that productivity, personal characteristics such as birthplace and gender, structural factors and labour market history impact on the distribution of the burden of unemployment. It is shown that labour market history is a major explanator of unemployment outcomes in the Australian labour market. The results from the empirical analyses of unemployment outcomes are used to identify individuals at risk of being unemployed. When individuals classi¢ed as at risk of being unemployed are followed through time, it is found that they spend considerable time looking for work and have short working spells. This suggests a risk index approach may have considerable merit as a way of identifying the relative di¤culty individuals experience in the labour market.

Child personality characteristics and selection into long-term unemployment in Finnish and Swedish longitudinal samples

“…This indicates that other factors were largely responsible for selection, but elucidating these was beyond the scope of the present study, which was concerned with analysing the role of personality characteristics in selection into unemployment. These other factors may, for example, be related to the structure of the labour markets and to specific occupational fields, as highlighted by economic and sociological approaches to selection into unemployment (Le & Miller, 2001;Podgursky & Swaim, 1987). Long-term unemployment was a more likely outcome in, for example, the construction industry, as a result of macroeconomic fluctuations in the Finnish and Swedish economies in the 1980s.…”

An Evaluation of Inertia Models of Unemployment

“…These are variables that reflect an individual's labour market productivity, those that capture the labour market/social practice of discrimination, and those that are related to structural factors. Le and Miller (1999) provide a detailed account of the influence of these variables on the unemployment outcome. Only summary comments will be provided here.…”

Dynamic Relationships in the Australian Labour Market: Heterogeneity and State Dependence

“…By contrast, Cripps and Tarling (1974) argue that what appears to be state dependence is, in fact, 'spurious' state dependence due to unobserved heterogeneity. Although the issue of state dependence versus heterogeneity has been broached in several international studies (see, for example , Heckman 1981c;Flaig et al 1993;Muhleisen and Zimmerman 1994;Hyslop 1999), the only Australian study that touches on this issue is that by Le and Miller (2001). The major contribution of this study is to investigate whether such dynamic relationships exist in the Australian labour market (specifically, the youth labour market).…”

“…The only Australian study that adopts a similar approach to the current paper is that by Le and Miller (2001), who use the (Australian) Survey of Employment and Unemployment Patterns to calculate an index of the risk of becoming unemployed. The Le and Miller (2001) analysis involves a 3-year panel, where a conventional model of unemployment (one that cannot account for unobserved characteristics) is supplemented by incorporating measures of the individual's labour market history and family characteristics to proxy for unobserved influences.…”