Job Search: the Duration of Unemployment

Abstract In a steady state, the unemployment rate is the result of the inflow rate and the mean duration of unemployment spells. In Britain and in the majority of the countries in Europe, the unemployment level rise has taken the form of a duration increase rather than an inflow rate increase. The chapter illustrates sufficient evidence that the unemployment experience has a great effect on search effectiveness, and that the long-term unemployed experience significant difficulty with going back to work. Cross-section data on the United States suggest that the duration of benefit availability is crucial. Most people enter a period of unemployment because their contract of employment naturally comes to an end, or they are dismissed from their job.