Abstract
The stigma associated with long-term unemployment spells could create large inefficiencies in labor markets. While the existing literature points toward large stigma effects, it has proven difficult to estimate causal relationships. Using data from a field experiment, we find that long-term unemployment spells in the past do not matter for employers' hiring decisions, suggesting that subsequent work experience eliminates this negative signal. Nor do employers treat contemporary short-term unemployment spells differently, suggesting that they understand that worker/firm matching takes time. However, employers attach a negative value to contemporary unemployment spells lasting at least nine months, providing evidence of stigma effects.
Original language | English |
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Pages (from-to) | 1014-1039 |
Journal | The American Economic Review |
Volume | 104 |
Issue number | 3 |
DOIs | |
Publication status | Published - 2014 |
Subject classification (UKÄ)
- Economic History