Labor-Market Behavior of Long-Term Unemployed: A Multidisciplinary Approach

Abstract

In the beginning of the eighties unemployment increased dramatically in the Netherlands. Since 1984 short-term unemployment has decreased, while at the same time long-term unemployment has continued to rise, absolutely as well as relatively. The issue of long-term unemployment is current and no solution seems to be in sight. Scientific research in the Netherlands on unemployment has put emphasis for a long time on the labor-market behavior of the unemployed. Labor-market behavior has in the 70s and 80s been investigated by researchers from various disciplines, starting from different notions of labor market behavior, applying various models and different methodologies. The disciplinary approach is therefore dominant, not only in the Netherlands but in other countries as well. In this article we have tried to elaborate a multidisciplinary model, in which economic, sociological and psychological approaches with respect to labor market behavior have been integrated into one conceptual framework. In order to do so, we have developed a non-recursive model of labor-market behavior. This model was estimated and tested applying a simultaneous estimation procedure (as implemented in the Linear Structural Relations, LISREL-program). Results show that the multidisciplinary perspective is not only theoretically appealing, but also has some empirical advantages.