The Effects of Unemployment Duration, Unemployment Insurance, and Occupational ‎‎Training on Wage

Document Type : Research Paper

Authors

1 PhD Candidate, Faculty of Economics, Department of Management and Economics, Shiraz Branch, Islamic Azad University, Shiraz, Iran (Phd dissertation)

2 Faculty of Economics, Department of Management and Economics, Shiraz Branch, Islamic Azad University, Shiraz, Iran

3 Assistant Professor and Faculty Member of economic group of Islamic Azad University, shiraz,iran

Abstract

Based on empirical studies and labor economics theories, the unemployment duration, acquiring occupational skills, and receiving unemployment insurance are among explanatory features of labor wages. With an increase in unemployment duration, selecting a job with low wage is more likely to be probable. On the other hand, by increasing human capital and improving occupational skills by participating in training courses, it is possible for the trained jobseeker to find a job with proper wage. But unemployment insurance has a double impact. On the one hand, unemployment insurance provides an opportunity for unemployed to search longer for a job with appropriate wage. On the other hand, the jobseeker receiving unemployment insurance becomes more selective and presumably decreases the job search intensity. This study examined the causal effects of these variables on the wages of jobseekers at work in the years of 1393-94 using the linear regression method. The results showed that there is a positive relationship between wages and learning occupational skills. The relation between unemployment duration and wages is negative and consistent with  theory,  receiving unemployment insurance does not have a significant effect on wages. The results of the model estimation using instrumental variables in two - stage least squares method showed  that the coefficients resulted from this method are greater than those of ordinary least squares method and their effects on wages are significant.
JEL Classification: J31, J64, J65, J68

Keywords

Main Subjects

References

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Journal of Economic Research (Tahghighat- E- Eghtesadi)
Volume 54, Issue 4 - Serial Number 129
January 2020
Pages 965-993

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History

  • Receive Date: 06 March 2018
  • Revise Date: 30 June 2019
  • Accept Date: 09 October 2019

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