Distribution of Unemployment Spells and Survival Analysis: The Case of Bosnia and Herzegovina

Abstract

It is not enough to study the labour market only by analysing the static variables like rates of employment and unemployment. For the decision making on the labour market it is essential to see the movement of people into and out of jobs, the extent to which they can or cannot quickly find alternative employment and to which extent different groups of the labour force are more affected than others.

Using the frailty models, as a specific area in survival analysis, we show that the durations of unemployment are sensitive to the educational level and gender.  First, females are experiencing significantly longer durations of finding job than man. Second, better-educated individuals appear to find job more quickly than the less-educated. Finally, there is evidence of duration dependence in unemployment in Bosnia and Herzegovina. The re-employment hazard exhibits positive duration dependence in the first 59 months, and then declines approximately 60 months.