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The role of worker flows in the dynamics and distribution of UK unemployment

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Elsby, Michael W. L., Smith, Jennifer and Wadsworth, Jonathan, Dr. (2011) The role of worker flows in the dynamics and distribution of UK unemployment. Working Paper. Coventry: University of Warwick. Dept. of Economics. Warwick economics research paper series (TWERPS), Vol.2011 (No.962).

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Abstract

Unemployment varies substantially over time and across subgroups of the labour market. Worker flows among labour market states act as key determinants of this variation. We examine how the structure of unemployment across groups and its cyclical movements across time are shaped by changes in labour market flows. Using novel estimates of flow transition rates for the UK over the last 35 years, we decompose unemployment variation into parts accounted for by changes in rates of job loss, job finding and flows via non-participation. Close to two-thirds of the volatility of unemployment in the UK over this period can be traced to rises in rates of job loss that accompany recessions. The share of this inflow contribution has been broadly the same in each of the past three recessions. Decreased job-finding rates account for around one-quarter of unemployment cyclicality and the remaining variation can be attributed to flows via non-participation. Digging deeper into the structure of unemployment by gender, age and education, the flow-approach is shown to provide a richer understanding of the unemployment experiences across population subgroups.

Item Type:

Working or Discussion Paper (Working Paper)

Subjects:

H Social Sciences > HD Industries. Land use. Labor

Divisions:

Faculty of Social Sciences > Economics

Library of Congress Subject Headings (LCSH):

Unemployment -- Great Britain, Labor market -- Great Britain

Series Name:

Warwick economics research paper series (TWERPS)

Publisher:

University of Warwick. Dept. of Economics

Place of Publication:

Coventry

Official Date:

2011

Dates:

Date	Event
2011	Published

Volume:

Vol.2011

Number:

No.962

Institution:

University of Warwick

Status:

Not Peer Reviewed

Publication Status:

Published

Access rights to Published version:

Open Access

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