Unequal Risks on the Flexible Labor Market, The Case of the Netherlands

In accordance with the needs and preferences of both employers and employees, labor markets in Western countries became increasingly flexible. However, for workers such flexibility bears the risk of long-term exclusion. This paper deals with unequal exclusionary risks on contemporary labor markets, particularly for those who are inactive and have unfavorable endowments. The data used to reveal the risks are based on stock sampling. We estimate hazard rate models that account for both the stock-sampling and the possible maximum duration for the transitions from unemployment, household care and disability to employment. In our analyses we try to control for differences in human capital characteristics, using a decomposition method. The main result is that unequal risks exist, but to a different degree for the various groups and with variations per transition type. Transition skills seem to have some but not much effect on job chances, while labor market experience turns out to protect from long-term exclusion. JEL classification: C41, J64, J7.