Duration of Unemployment in Spain: Relative Effects of Unemployment Benefit and Family Characteristics.

We estimate the effects of unemployment benefit and family situation on the unemployment duration in Spain. Empirical results indicate that the distinctions between the exits into employment and the exists from the labor force and between men and women are important. Although unemployment benefit reduces significantly the job-finding probabilities, its effects are much larger on exists from the labor force. Many people who decide to go out of the labor force delay their exists until they exhaust their unemployment benefits. Family situation also has strong effects on the duration of unemployment in Spain. Household heads have about twice larger job-finding probability than non-heads, and having a working household head or other working household members improves employment probability. This suggests that family connections in the labor market are important determinants of unemployment duration in Spain. Copyright 1995 by Blackwell Publishing Ltd