Local Labour Markets and Unemployment Duration

Abstract

This paper explores the relationship between local unemployment rates and the length of time people who have lost their job spend unemployed, using a competing risks model. High local unemployment is found to reduce the probability of re‐employment for someone who was employed prior to a period of unemployment. However, individual factors such as age, education and experience are more important predictors of re‐employment. This suggests there could be benefits from a policy response that focuses more on the individuals, and building skills that are resilient to structural change, than on job creation in local areas.