Dynamic Asymmetries in U.S. Unemployment

We examine dynamic asymmetries in U.S. unemployment using nonlinear time series models and Bayesian methods. We find strong statistical evidence in favor of a two-regime threshold auto-regressive model. Empirical results indicate that, once we take into account both parameter and model uncertainty, there are economically interesting asymmetries in the unemployment rate. One finding of particular interest is that shocks that lower the unemployment rate tend to have a smaller effect than shocks that raise the unemployment rate. This finding is consistent with unemployment rises being sudden and falls gradual.     

The Political Consequences of Outsider Labour Market Status in the United States: A Micro‐level Study

This article contributes to recent research that seeks to understand the political consequences of ‘outsider’ labour market status. There is an emerging consensus that labour market outsiders have systematically different policy preferences and display systematically different political behaviour to securely employed ‘insiders’ in Europe. Yet the political consequences of outsider status in the USA are less clear. They may be expected to differ from those that have been documented in the European context, because: (1) the USA is characterized by low employment protection of insiders; and (2) there is evidence that Americans are more reluctant than Europeans to hold governments responsible for personal economic hardship. We therefore use the General Social Survey to examine how outsider labour market status is related to voting behaviour and to social policy preferences in the USA. We find that the concept of ‘labour market outsider’ – as conventionally operationalized – holds little explanatory power in the American context. Disaggregating the outsider category, our results suggest that the political consequences of outsider labour market status may be contingent on individual beliefs about government responsibility.     

Partially linear censored quantile regression

Censored regression quantile (CRQ) methods provide a powerful and flexible approach to the analysis of censored survival data when standard linear models are felt to be appropriate. In many cases however, greater flexibility is desired to go beyond the usual multiple regression paradigm. One area of common interest is that of partially linear models: one (or more) of the explanatory covariates are assumed to act on the response through a non-linear function. Here the CRQ approach of Portnoy (J Am Stat Assoc 98:1001–1012, 2003) is extended to this partially linear setting. Basic consistency results are presented. A simulation experiment and unemployment example justify the value of the partially linear approach over methods based on the Cox proportional hazards model and on methods not permitting nonlinearity.     

Uniform Inference on Quantile Effects under Sharp Regression Discontinuity Designs

ABSTRACT

This study develops methods for conducting uniform inference on quantile treatment effects for sharp regression discontinuity designs. We develop a score test for the treatment significance hypothesis and Wald-type tests for the hypotheses related to treatment significance, homogeneity, and unambiguity. The bias from the nonparametric estimation is studied in detail. In particular, we show that under some conditions, the asymptotic distribution of the score test is unaffected by the bias, without under-smoothing. For situations where the conditions can be restrictive, we incorporate a bias correction into the Wald tests and account for the estimation uncertainty. We also provide a procedure for constructing uniform confidence bands for quantile treatment effects. As an empirical application, we use the proposed methods to study the effect of cash-on-hand on unemployment duration. The results reveal pronounced treatment heterogeneity and also emphasize the importance of considering the long-term unemployed.     

Classification-Error Models and Labor-Market Dynamics

Measurement error is often a severe problem in longitudinal data such as labor-market flows. Two correction methods have been used for labor-market flows, but the methods tend to adjust the data in opposite directions. One method shows a rigid labor market with long unemployment spells, whereas the other shows the opposite. Because the methods appear theoretically similar, one might interpret the differing results as an indictment of both procedures. This article documents and explains the differences between the two methods. More important, it argues that the differences result from the reliance of one method on assumptions that are theoretically implausible and rejected by the data.     

Enforcing Mobility: Spatial Mobility under the Regime of Activation

Abstract

Spatial mobility is rarely investigated with a view on social policy and welfare administrations. Yet, recent activation and workfare policies have increased pressures on the unemployed, with one of these pressures concerning spatial mobility, i.e. the requirement to accept jobs that entail long commuting hours or even relocation. This paper investigates the shift towards activation in Germany, focusing on increased demands on job-seekers’ mobility, and uses a governmentality perspective, supplemented by the concept of symbolic violence, to gain insight into the strategies and practices deployed by Public Employment Service (PES) staff to produce ‘mobile selves’. It demonstrates that perceptions of (im)mobility figure prominently in the assessment not only of job-seekers’ labour market prospects but also of their character and motivation to seek work. Thus, the personal and familial implications of mobility are considered as mitigating circumstances mainly in the case of older jobless with poor labour market prospects. The majority of job-seekers, and particularly those living in regions with high unemployment, are subject to efforts on the part of PES staff to make them understand the necessity of being as mobile as possible; if such insight is found wanting, pedagogical devices are deployed to enhance job-seekers’ mobility.     

The Emergence of a Community-based Social Assistance Programme in Urban China

To many people, the problem of poverty in China was confined mainly to the rural areas, and the situation of urban poverty was regarded as insignificant. Yet in fact, market-orientated economic reforms have created an urban underclass, made up of poorly paid state workers, the unemployed, and migrants from the countryside. In attempting to respond to the mounting needs of the urban poor, the Chinese government has introduced a means-tested social assistance programme in the cities since the mid-1990s. This paper describes the basic philosophy, structure and operation of this programme, and provides a general assessment of its functions and shortcomings.     

The link between unemployment and crime rate fluctuations: An analysis at the county, state, and national levels

Cantor and Land (1985) developed a theoretical model that proposed two pathways through which economic activity - as indexed by the aggregate unemployment rate - could affect the rate of criminal activity. The first is by increasing levels of criminal motivation within the population as deteriorating economic conditions affect social strain and social control; the second is by influencing the availability and vulnerability of criminal targets and thus the number of criminal opportunities. Although much empirical research has applied this theoretical model, few analyses have done so at disaggregated units of analysis. We present the most comprehensive analysis to date by empirically evaluating this model with data on 400 of the largest US counties - and examine the effects of aggregation on results as these county data are combined to the state and national levels - for the years 1978-2005. For seven Index crimes at each of the three levels of analysis, and with or without controls for structural covariates at each level, the directional effects hypothesized by Cantor and Land are found for 78 out of 84 estimated relationships. Even after taking into account the lack of statistical independence of these estimates by drawing on recently developed statistical theory, this is a very unlikely outcome. In accordance with expectations based on theory and prior research, (a) some of these relationships are weak and not statistically significant, and (b) the strongest and most consistent patterns of relationships for both the crime opportunity and crime motivation effects are found for three property crimes: burglary, larceny, and motor vehicle theft. Suggestions for further research on this topic are given.     

The scarring effect of unemployment on psychological well-being across Europe

Past unemployment may have a pervasive psychological impact that occurs across nations. We investigate the association between unemployment events across working life and subsequent psychological well-being across 14 European countries. Additionally, we consider the influence of between-country differences in labour market institutions and conditions on the cross-country well-being effects of unemployment. Data detailing life-long employment trajectories and contemporary life conditions are drawn from the Survey of Health, Ageing and Retirement in Europe. The well-being impact of unemployment is modeled using linear, multi-level specifications. Each six-month spell of past unemployment is found to predict reduced quality of life and life satisfaction after the age of 50, having adjusted for a broad range of individual and country-specific covariates. In contrast, the impact of past unemployment on depression is explained by individual demographic factors. We identify the first comparative long-term evidence that unemployment welfare scarring may be a broad, international phenomenon.     

Extracting the causal component from the intergenerational correlation in unemployment

This paper examines the intergenerational correlation in unemployment in Norway and discusses and estimates two approaches for extracting the causal component: sibling differences and the use of parental unemployment occurring after the child’s outcome as control for the unobserved family heterogeneity. Confirming existing evidence, I find a substantial intergenerational correlation in unemployment. Almost half of this is due to observed family heterogeneity. The causal effect is found to be statistically insignificant by both identification strategies, but while the estimated effect is negative on the sample made for the sibling-difference approach, this finding is not replicated on a less selective sample.