Duration Dependence and Labor Market Experience

Abstract We study whether unemployment duration dependence—the negative effect of a current spell on an individual's employment probability—varies with labor market experience. Using data from the National Longitudinal Survey Youth and Current Population Survey, we show that although there is dependence for experienced workers, it mostly absent new entrants to force. This difference suggests structural forces in addition ex ante heterogeneity job‐finding probabilities dynamic selection may drive dependence. Our findings are robust econometric model used number demographic controls time trends, as well individual fixed effects. also discuss theories can explain our empirical findings.