Do the rich stay unemployed longer? An empirical study for the UK

This paper investigates the impact of individual asset holdings on the prob ability of leaving unemployment. According to the theory, higher levels of financial wealth will result in higher reservation wages and longer unemplo yment durations. I estimate the impact of financial assets on the hazard ra te, using data for Great Britain. The empirical findings indicate that indi vidual asset holdings affect significantly the escape rate out of unemploym ent. In particular, negative (positive) levels of wealth increase (reduce) the hazard of leaving unemployment. The size of the impact is, however, rat her small. Increasing by 100% the level of wealth of a representative indiv idual, with net wealth and other individual characteristics equal to the sa mple mean, increases the duration of the unemployment spell by half a week.