BARRIERS TO EMPLOYMENT; Entry and Re-entry Possibilities of Unemployedjob Seekers in the Netherlands

In this paper, the barriers to re-employment for unemployed job seekers are studied by means of duration models. The determinants included in the duration models are derived from an economie model of the different stages in the job search process. The empirical analysis of unemployment duration is based on both a reduced form and a structural approach. The reduced form model used is a propottional hazard model with a flexible base-line hazard. In the estimation procedure, special attention is paid to the problems of unobserved heterogeneity and attrition bias. The estimation results showthat age and non-labour income have a significant negative impact on the re-employment probability of unemployed job seekers. In addition, the hazard rate appears to be negative duration dependent. In the structural model, the rate at which unemployed job seekers find a job is decomposed into the application rate and the probability of receiving an actual job offer if an application is made. We find that the low probability of becoming (re-)employed is mainly caused by the low probability to receive an actual offer. Furthermore, differences in the application intensity of unemployed job seekers can be explained by various personal characteristics, regional labour market conditions, elapsed duration of unemployment and search methods, whereas the outcome of the selection process is mainly influenced by the qualifications of unemployed job seekers.