Long-term unemployment: a question of skill obsolescence (updating existing skills) or technological shift (acquiring new skills)?

Abstract

This paper empirically explores the role of skill losses during unemployment behind firms’ behaviour in interviewing long-term unemployed. The analysis makes use of the Work Employment Relations Survey in the UK, while it applies a Panel Probit Modelling approach to estimate the empirical findings. The findings document that skill losses during long-term unemployment reduce the likelihood of an interview, while they emphasize the need for certain policies that could compensate for this skills deterioration. For robustness check, the estimation strategy survives the examination of the same predictors under different types of the working environment. The original values of the work lie on combining for the first time both duration and technology as predictors of interview probability. Until now, the independent variables were used to test whether an individual has managed to exit unemployment, thus skipping the step of the interview process.