Duration of unemployment in the Dutch youth labour market

Summary This paper is concerned with the specification and estimation of a one-state proportional hazard model to explain the duration of unemployment in the Dutch youth labour market. Special attention is given explaining the unequal distribution of unemployment experiences among young labour force participants. The model is estimated using data from a 1984 national random sample of young people unemployed in May and interviewed in October/November. It is found that the replacement ratio has no significant effect. The predicted youth wage on the other hand is significant. The paper also presents and compares different functional forms for modelling duration dependence and heterogeneity.A more extensive version of this paper was published by the Organisation for Strategic Labour Market Research (OSA) in The Hague as working paper nr. 14, 1985. We wish to thank this organisation for its encouragement and for its financial support. We also wish to thank M. Bom, J. Hartog, T. Manders, E. de Regt and G. Ridder for their comments and help.