Exits from Unemployment Spells in Germany and the United Kingdom: A Cross-National Comparison (1990-1996)

Panel Survey (BHPS). The data are used with the permission of all responsible authorities, who bear no responsibility for the analysis or interpretations presented here. improvement of the paper. All errors and deficiencies remaining in the paper are our own. ABSTRACT This paper investigates unemployment from the angle of unemployment spells experienced by individuals in Germany and the United Kingdom in the first part of the 1990s using longitudinal micro data of the British and German part of the EPAG dataset which is based on the BHPS and the GSOEP. Preceding information on ordinary unemployment rates and a brief description of the labour market regimes is given in advance. Discussing survivor curves of unemployment phases, we find the following evidence: Explicit gender differences concerning unemployment rates reappear in the shape of survivor rate curves: British females display shorter unemployment phases as opposed to their male counterparts whereas the reverse is true for Germany. Additionally the extension of this gender discrepancy is more serious in East-Germany than in West-Germany. Comparing the population continuing with employment to those who exit into economic inactivity in the United Kingdom we observe a completely different pattern. Up to a specific threshold in time, a relatively high proportion of both sexes remains in unemployment. After this point an increasing proportion of females exits to economic inactivity whereas a high proportion of males still remains in unemployment. General assumptions of the human capital approach could clearly be verified when examining the effects of individual characteristics on the exit process from unemployment. Accordingly, individuals with a relatively high (low) educational attainment tend to experience relatively short (long) unemployment phases. Additionally the factor age matters. The pattern 'the younger (older), the higher (lower) the likelihood to leave unemployment' occurs for males and females both in Germany and in the UK. Nevertheless those who are young and less skilled do not have an comparative advantage to those who are old and less skilled in the UK.