Unemployment Duration: Evidence from the Household Labour Force Survey

Abstract

Research on labour market dynamics in New Zealand has been limited mainly due to data limitations. The introduction of the quaterly Houshold Labour Force Survey (HLFS) in December 1985 has greatly increased information on the New Zealand labour market. In this study we propose to test for a relationship between unemployment duration and the ability for individuals to leave unemployment. For example, if the probability of leaving unemployment for a job declines that longer one has already been unemployed, then this could be taken as evidence in support of the Clark and Summers (1979) hypothesis that a concentrated group of persistently unemployed are a large proportion of unemployment. The evidence presented here supports this view, but doubt remains as no allowance is made for other influencing factors.