The unemployment process : studies of search, selection, and social mobility in the labor market

Abstract: The purpose of this thesis is to examine some particular aspects of the unemployment process, the process by which the risk of unemployment is distributed within a population. This process can be partitioned into five distinct stages; the initiation of a "negative work career", entry into unemployment, the situation during unemployment, exit from unemployment, and finally the long-term consequences of unemployment for the employment situation of the individual. Each stage is here a junction at which an individual's work career may be thrown of course, and become a career of downward social mobility. At each stage, a number of distinct sub-processes may thus affect the likelihood of successful worklife re-entry, alternatively the probability of further labor market marginalization. In four separate papers, aspects of the unemployment process relating to search and selection in the labor market are here studied.The risk of entry into unemployment is thus examined in the first study, Structures of Misfortune. Since unemployment is an event with a dramatic impact on individual welfare, it would appear that the determinants of the risk of unemployment should be a central question for stratification research. This has not been the case, and this paper attempts to fill this void by examining the impact of micro, meso, and macro factors on the risk of unemployment among employees. The results show substantial differences in the risk of unemployment. The market context of the employing organization, that is public vs. private and degree of product market competition within the private sector, thus significantly affect the unemployment risk. Organizational aspects and job characteristics also affect the degree of employment precarity experienced by the employees.Attention then turns to processes at work during unemployment, here exemplified by the question regarding the existence of an effect of unemployment on physical health. Despite a vast number of studies, firm empirical evidence on the importance of health based selection vs. a causal effect of unemployment is largely lacking. In the second study, Accumulating Disadvantage, analyses of health based selection in to and out of unemployment are presented, as well as of the effect of unemployment on health. The former show that ill-health increases the risk of both becoming and remaining unemployed, or in other words that health affects labor market mobility. The latter analyses, which take into account a number of alternative selection possibilities, evidence an unequivocal worsening of health status due to unemployment.The subsequent study focuses on the possibilities of re-entering employment. How information about job openings is distributed has thus been said to be a central determinant of job mobility, and interest here focuses on the impact of social networks. Previous analyses of the network effect have neglected fundamental aspects of social networks such as the impact of network size, and are furthermore plagued by uncertainties relating to possible self-selection. In the third study, Good Friends in Bad Times, evidence is offered on how the employment probability is affected by the use of contacts during the period of job search, with the problem of selection bias taken into explicit consideration. The results indicate network size to be positively related to the probability of employment.The final topic relates to the long-term employment prospects of the unemployed. In the debate around the relationship between temporary work and unemployment, it has been argued both that temporary work mainly is a precursor to recurrent unemployment and that it often acts as an entry port to stable employment. Little is however known about actual mobility patterns, including the impact of temporary work on subsequent unemployment and employment. In the fourth study, Precarious Footing, such evidence is presented, and show temporary employment to be negatively associated with subsequent unemployment and positively related to subsequent employment. The possibility of differences in the precarity of temporary work has also been examined, differences relating to sex, sector of employment, and skill level. Previous research had thus suggested that the impact of temporary work may differ between, for example, men and women, yet no such difference is found here.