We establish five facts about prices in the U.S. economy: 1) The median implied duration of consumer prices when sales are excluded at the product level is between 8 and 11 months. The median implied duration of finished goods producer prices is 8.7 months. 2) One-third of regular price changes are price decreases. 3) The frequency of price increases responds strongly to inflation while the frequency of price decreases and the size of price increases and price decreases do not. 4) The frequency of price change is highly seasonal: It is highest in the 1st quarter and lowest in the 4th quarter. 5) The hazard function of price changes for individual consumer and producer goods is downward sloping for the first few months and then flat (except for a large spike at 12 months in consumer services and all producer prices). These facts are based on CPI microdata and a new comprehensive data set of microdata on producer prices that we construct from raw production files underlying the PPI. We show that the 1st, 2nd and 3rd facts are consistent with a benchmark menu-cost model, while the 4th and 5th facts are not.

This paper uses two data sets to examine the impact of the potential duration of unemployment insurance (UI) benefits on the duration of unemployment and the time pattern of the escape rate from unemployment in the United States. The first part of the empirical work uses a large sample of household heads to examine differences in the unemployment spell distributions of UI recipients and nonrecipients. Sharp increases in the rate of escape from unemployment both through recalls and new job acceptances are apparent for UI recipients around the time when benefits are likely to lapse. The absence of such spikes in the escape rate from unemployment for nonrecipients strongly suggests that the potential duration of UI benefits affects firm recall policies and workers' willingness to start new jobs. The second part of our empirical work uses accurate administrative data to examine the effects of the level and length of UI benefits on the escape rate from unemployment of UI recipients. The results indicate that a one week increase in potential benefit duration increases the average duration of the unemployment spells of UI recipients by 0.16 to 0.20 weeks. The estimates also imply that policies that extend the potential duration of benefits increase the mean duration of unemployment by substantially more than policies with the same predicted impact on the total UI budget that raise the level of benefits while holding potential duration constant.

In this paper I propose to estimate distributions on the unit interval semi-nonparametrically using orthonormal Legendre polynomials. This approach will be applied to the interval censored mixed proportional hazard (ICMPH) model, where the distribution of the unobserved heterogeneity is modeled semi-nonparametrically. Various conditions for the nonparametric identification of the ICMPH model are derived. I will prove general consistency results for M estimators of (partly) non-Euclidean parameters under weak and easy-to-verify conditions, and specialize these results to sieve estimators. Special attention is paid to the case where the support of the covariates is finite.

This paper provides a first look at the dynamics of social assistance use among lone mothers in Ontario. We use an administrative caseload data set to analyse the relationship between the duration of spells, both on welfare and off welfare, and a series of factors including the clients' personal characteristics, their history of welfare use, the duration of current spells, labour market conditions and social assistance benefit levels.

We investigate why we observe non-negative duration dependence among young unemployed men in urban Ethiopia. Assuming that genuine duration dependence is negative, there are five explanations for a non-decreasing hazard: the presence of unemployment benefits, the existence of Active Labour Market Policies, the change in labour demand, segmentation of the labour market, and unemployment as a queuing phenomenon. We test each of these explanations and find that labour market segmentation is the only convincing one. We also establish that genuine duration dependence is indeed negative in the long run.

University, where I have done most of the work in this paper, have been extremely supportive. In particular, Prof. Steve Bradley and Dr Anh Nguyen deserve utmost gratitude. David Stott of the Centre for Applied Statistics in Lancaster University never tired of supplying me with the FORTRAN programs that allowed me to get some of the results in this paper. Dr Tekie Alemu of the Department of Economics, Addis Ababa University, has gone through the pain of reading/commenting on an earlier version of this This study investigates the duration of unemployment following job displacement. It uses data from the first fourteen sweeps of the German Socio-Economic Panel (GSOEP) survey for the purpose. The paper employs both parametric and non-parametric discretetime models to study the duration of displacement unemployment spells. Alternative mixing distributions have also been used to account for unobserved heterogeneity. Results from single and competing risks models show that the average hazard rate of exit via re-employment declines with the duration of time in unemployment. On the other hand, the average hazard rate of exit via inactivity increases as the duration of unemployment lengthens. Accounting for unobserved heterogeneity does make a

Le CIRANO est un organisme sans but lucratif constitué en vertu de la Loi des compagnies du Québec. Le financement de son infrastructure et de ses activités de recherche provient des cotisations de ses organisationsmembres, d’une subvention d’infrastructure du ministère de la Recherche, de la Science et de la Technologie, de même que des subventions et mandats obtenus par ses équipes de recherche. CIRANO is a private non-profit organization incorporated under the Québec Companies Act. Its infrastructure and research activities are funded through fees paid by member organizations, an infrastructure grant from the Ministère de la Recherche, de la Science et de la Technologie, and grants and research mandates obtained by its research teams.

In this paper we analyze the impact of bene ts on the length of welfare spells. It introduces a natural experiment approach of comparing the length of welfare spells before and after a major reform of the welfare program that took place in the Province of Québec in August 1989. An important feature of this reform was the abolishment of discrimination based on age that applied to the bene ts single individuals and childless couples below the age of 30 were entitled to. With the reform, their monthly bene ts rose from $173 ( $ 1986) to $425, an increase of over 145%. To analyze the impact of the reform, we utilize a semi-parametric duration model with time-varying covariates such as welfare bene ts, minimum wage rate, unemployment rate, etc. We nd that bene ts have an important impact on spell duration of individuals below 30years of age. We also nd that the minimum wage rate has an adverse e ect on the duration of individuals in the 18 24 age group but a positive e ect on those in the 25 29 age group. Finally, our estimates suggest that the reform increased the expected duration on welfare from 2 to 5 months. We would like to thank Patrick Déry, Éric Simard and Claude Bilodeau for able research assistance. Pierre Lanctôt, Ghislaine Morin and Suzanne Lévesque of the Ministère de l'emploi et de la solidarité provided useful comments on an earlier draft. Finally, wewant to thank the Ministère de l'emploi et de la solidarité for nancial support and for providing the data, As well as Health and Welfare Canada and Centre Québécois de la Recherche Sociale for nancial support.

The Dutch labor force participation rate of elderly is among the lowest of Europe and early retirement schemes play an important role. Already in the early 1990s, unions and employer organizations recognized the adverse incentive effects of the generous and actuarially unfair PAYG schemes and decided to transform these to less generous and actuarially fair capital funded schemes. The starting dates of the transitional arrangements varied by sector. In this study, we exploit the variation in starting dates to estimate the impact of the policy reform on early retirement behavior. We use a large administrative dataset, the Dutch Income Panel of the National Tax Office, to estimate hazard rate models for early retirement. We conclude that the policy reform induces workers to postpone early retirement. Model simulations show that the transitional scheme has already led to average retirement postponement by 8 months, which will become almost a year once the transition is completed.