Job seeker's allowance in Great Britain: How does the regional labour market affect the duration until job finding?

Abstract

Employing a large individual-level administrative dataset from Great Britain, covering the period 1999-2007, we analyse the factors influencing the length of unemployment benefits claimant periods with subsequent transition to re-employment. To this end, this individual-level data is merged with a group of regional indicators to control for relevant regional labour market characteristics. From a methodological point of view, we adopt a flexible censored quantile regression approach to estimating conditional re-employment hazards. Our results indicate that the individual characteristics of an unemployed person are generally more im- portant than the regional labour market conditions. However, regional labour supply and demand conditions are important determinants for the length of unemployment compensation claim periods. Our analysis provides evidence that large cities such as London and Birmingham provide the worse local labour market conditions for job seekers allowance recipients, while remote regions like the Shetland islands perform among the best.benefit duration, quantile regression, hazard rate.