Unemployment in Ukraine Composition

Economics Education and Research Consortium Working Conventional paper Series ISSN 1561-2422

Not any 05/01

Determinants of joblessness duration in Ukraine

Olga Kupets

This project (No. 02-237) was supported by the Economics Education and Analysis Consortium All opinions stated here are those of the author and not those of the Economics Education and Exploration Consortium Exploration dissemination by the EERC might include views on plan, but the EERC itself usually takes no institutional policy positions Research region: Labor Market segments and Sociable Policy

JEL Classification: J64, J68, P23

KUPETS O. V. Determinants of unemployment duration in Ukraine. — Moscow: EERC, 2005.

This kind of paper gives first data on the determinants of unemployment duration in Ukraine among 1997 and 2003, applying individual-level info from the initial wave in the Ukrainian Longitudinal Monitoring Review (ULMS-2003). That investigates the conditional probability of an specific leaving joblessness to work or monetary inactivity in any particular month of his spell out of by calculating it in a discrete period independent rivalling risks structure with versatile baseline risk rates and gamma-distributed unobserved heterogeneity. The results in almost all specifications show no significant effect of getting unemployment benefits but significant negative effect of having salary from informal activities, additional farming, household income or pension on the hazard of re-employment. Multivariate analysis also suggests that policies to reduce long-term unemployment ought to focus on more mature workers, much less educated persons, residents of small villages and countryside area in the regions with relatively large unemployment costs.

Keywords. Ukraine, long-term lack of employment, unemployment insurance, semiparametric duration analysis, adaptable baseline hazard.

Acknowledgements. The author is thankful for the constructive criticism and helpful comments via Rostislav Kapelyushnikov, Hartmut Lehmann, Irina Denisova, Michael Beenstock, Reuben Gronau, Klara Sabirianova, John Earle, Christian Belzil, Atanas Christev, Anna Lukyanova, Inna Maltseva, and participants of the IER (Kiev) Meeting on Labor Market Reforms and Monetary Growth in Ukraine: Cordons and Guidelines in Kiev (March, 2004). Financial assistance from the EERC (Russia) about grant R02-237, from INTAS (Belgium) on grant PENDANT 2002-249/F7, and from the Economics Research and Outreach Centre (EERC, Ukraine) is gratefully acknowledged. Exceptional thanks to the Company for study regarding Labor (IZA, Bonn) as the INTAS host establishment for support and hospitality. Data for this study are taken from the first influx of the Ukrainian Longitudinal Monitoring Survey (ULMS) which has been completed by the Kiev International Start of Sociology on behalf of the international holding of beneficiaries led by the Institute for the Study of Labor (IZA, Bonn, Germany).

Olga Kupets Economics Research and Outreach Center Economics Education and Exploration Consortium Nationwide University " Kiev-Mohyla Academy” Office 214, bld. 12, Voloshskaya str., 04070 Kiev, Ukraine Tel.: (38 044) 239 twenty-four 94 Send: (38 044) 239 24 90 E-mail: [email protected] kiev. ua

п›™ O. Versus. Kupets 2005

CONTENTS

NON-TECHNICAL SUMMARY 1 ) INTRODUCTION 2 . UNEMPLOYMENT DURATION IN MOVE COUNTRIES: MATERIALS REVIEW a few. THE CHALLENGE FOR THE OUT OF WORK IN UKRAINE: UNEMPLOYMENT INSURANCE OR OPTION SOURCES OF SUBSISTENCE? 4. METHOD AND DATA 4. 1 ) 4. 2 . 4. three or more. 4. four. Theoretical style Econometric platform Data and definition of factors Methodological problems

4 six

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15 21 twenty one 23 twenty-seven 36 forty 40 forty-four 60 sixty four 64 67 73 74

5. APPRAISAL RESULTS your five. 1 . Univariate non-parametric duration analysis a few. 2 . Multivariate semiparametric period analysis 6. CONCLUSIONS BOUT A1. Lack of employment insurance system in Ukraine: regulatory framework A2. Sort of retrospective queries from the Individual questionnaire with the ULMS-2003 A3. Construction in the main factors for the...

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