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An Empirical Investigation of School to Work Transition Using the Gompertz Model

by | Jan 16, 2020 | DOI 2018

Ana Gorenca
Aleksandër Moisiu University of Durrës, Durrës, Albania
DOI: https://doi.org/10.31410/eraz.2018.330

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4th International Conference – ERAZ 2018 – KNOWLEDGE BASED SUSTAINABLE ECONOMIC DEVELOPMENT, Sofia- Bulgaria, June 7, 2018, CONFERENCE PROCEEDINGS published by: Association of Economists and Managers of the Balkans, Belgrade, Serbia;  Faculty of Business Studies, Mediterranean University – Podgorica, Montenegro; University of National and World Economy – Sofia, Bulgaria; Faculty of Commercial and Business Studies – Celje, Slovenia; Faculty of Applied Management, Economics and Finance – Belgrade, Serbia, ISBN 978-86-80194-12-7

Abstract

This paper investigates the impact of socio-economic factors on the unemployment spell of fresh graduates. The data sample is drawn from the Living Standards Measurement Survey of Albania in 2012. We restrict the sample to only those aged from 19 to 35 years old to reduce the heterogeneity among unemployed graduates. In addition, we drop all observations with unemployment spell greater than 19 years given that the minimum working age in Albania is 16. The job-search theory constitutes the theoretical framework of this work. The socio-economic factors we examine in this paper are age, gender, education attainment, residence and occupation. The empirical part employs the Gompertz hazard proportional model. to determine the effect of socio-economic factors on the first unemployment period of fresh graduates. Our findings indicate that the Gompertz model provides a better fit to the data based on the AIC value compared to other models including the log-logistic and Cox models. Further, the estimates in the Gompertz specification are in line with the theoretical findings of the job-search theory. Education, age, gender and occupation are significant determinants of the first unemployment spell. In all models, the indicator of urban residence results insignificant. Moreover, unemployment duration increases with age. Lastly, those with high levels of education and high occupation profiles have higher odds of exiting from unemployment.  

Key words

unemployment spell, hazard rate, proportional hazard, Gompertz


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