Profiling - Predicting Long-Term Unemployment at the Individual Level

Abstract

Labour market policy encourages both the preventive and proactive approaches in order to avoid negative impacts. Unfortunately, a large number of evaluation studies show that active intervention is helpful only if it is targeted according to the prevailing situation and needs of claimants. The first step in the targeting process is to determine in advance which claimant has a significant probability of becoming long-term unemployed and just how high the risk is.<br />This paper deals with the predicting of long-term unemployment at the individual level. In contrast with research carried out elsewhere, the paper stresses the theory behind the statistical model. As far as the Czech Republic is concerned it has been shown that a model computed using only data from the official unemployment register is correct in 78% of cases, i.e. 20 percentage points more than the result obtained by means of the constant or risk group approaches.<br />

Keywords

• Long-term unemployment, job search theory, labour market policy, profiling, targeting