Explaining the Employability Gap of Short-term and Long-term Unemployed Persons

Abstract

This paper analyzes the determinants of employability di erences between short-term and long-term unemployed persons. Knowing these di erences could help to address active labor market policy programs more adequately to the needs of the job-seekers in order to increase integration rates into employment. Based on merged survey and register data di erences in job nding chances of these groups are decomposed into a part due to di erences in attributes and a part due to di erences in valuing the attributes. The estimates clarify that current active labor market programs do not address important factors of employment. Particularly, health of the job seekers, limitations in the working ability and obstacles to employment comprising drug abuse, nancial debts or care obligations for children or frail elderly play a signi cant role for successful placement. The conclusion is that policy makers should integrate these issues in the placement process.