Cyclical variations in unemployment duration

In this paper I study how individual unemployment durations vary over the b usiness cycle, using unemployment spells of a sample of Danish workers. A c ompositional, an outflow, and a residual calendar-time component are identi fied, and they all contribute to explaining the variations in unemployment duration. Based on the analysis it is concluded that long-term unemployment is a phenomenon that is associated with periods of high unemployment, but nothing should prevent the long-term unemployed finding jobs again as aggre gate unemployment eventually starts falling. In particular, there is no evi dence of negative duration dependence, not even at long durations, and not when aggregate unemployment is high.