Title: Worker occupational skills and unemployment duration: a competing-risks econometric approach

Authors: Ahmed Wassal Elroukh

Addresses: Department of Economics, Faculty of Economics Studies and Political Science, Alexandria University, Egypt; Department of Economics, School of Business, The American University in Cairo, Egypt

Abstract: This paper explains differences in unemployment duration among unemployed workers by differences in their skills, using the unemployed workers' previous occupation and education level to capture their skills. I use the cumulative incidence approach from the statistics literature, which is a better alternative to the standard survival econometric methods in cases of competing risks. In addition to showing that the standard survival econometric methods are biased, I find that the higher the unemployed worker is on the skill ladder based on their previous occupation, the faster their transition rate to a full-time job. An extra year of education has a positive effect on reducing unemployment duration. Those with a bachelor's degree tend to have the shortest employment duration among all unemployed individuals. However, the impact of education on transitioning from unemployment to a full-time job is less pronounced the higher the unemployed worker's previous occupation is on the skill ladder.

Keywords: human capital; unemployment; competing risks; worker skills; duration analysis.

DOI: 10.1504/IJCEE.2024.139762

International Journal of Computational Economics and Econometrics, 2024 Vol.14 No.3, pp.306 - 336

Accepted: 20 Jan 2024
Published online: 05 Jul 2024 *

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