Mechanisms behind the Occurrence of Long-Term Unemployment and the Problems It Causes: A Theoretical Investigation  

Oleh:

Mitani, Naoki

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Japan Labor Review vol. 12 no. 03 (2015), page 5-24.
Topik: theoretical literatur; concerning factors; method of recruitment screening
Fulltext: JLR47_mitani.pdf (1.03MB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ134 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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This paper is mainly concerned with surveying theoretical literature on the mechanisms behind the occurrence of long-term unemployment and the prob- lems caused by long-term unemployment. Factors behind increases in the in- cidence of long-term unemployment may be broadly divided into a decrease in the exit probability from unemployment of average duration, and an increase in the negative unemployment duration dependency of the exit probability. A decrease in the exit probability from une mployment of average duration is mostly caused by the same factors as a general increase in unemployment. On the other hand, there are various hypotheses concerning factors that cause the negative duration dependency of the exit probability. For example, (i) the screening hypothesis, whereby the exit probability of long-term unemployed decreases because unemployment duration is used as information showing the ability of workers as a method of recruitment screening, when there are heter- ogeneities among jobseekers; (ii) the ranki ng rule hypothesis, whereby the exit probability of long-term unemployed decr eases because jobseekers with the shortest unemployment duration are chosen when there are no heterogeneities among jobseekers but there are multiple job applications for a job opening; (iii) the hypothesis that a negative duration dependency arises in the exit probability because workers’ skills and willingness to work decrease during unemployment; and (iv) the hypothesis th at the exit probabi lity of long-term unemployed decreases because companie s discriminate against long-term unemployed even if some unemployed workers invest financially in maintain- ing their skills. It has also been point ed out that long-term unemployment is prone to occur because the loss of skills due to unemployment is particularly pronounced at times when structural ch anges occur in the economy. Problems caused by long-term unemployment include the fact that increases in long-term unemployment cause wages to rise, make unemployment more per- sistent, and widen income disparity, and the fact that long-term unemployment significantly reduces the happine ss level of the unemployed.

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