Does Culture Affect Unemployment Duration?

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 18.03.2008, 12:15 - 13:30


Presentation by 

Rafael Lalive (University of Lausanne)


This paper studies the effect of culturally shaped preferences for leisure (PL) and implementation of active labor market policies (ALMP) on the duration of unemployment. Identifying this effect is difficult due to omitted variables and reverse causality. We propose to use a sharp change in language to instrument for culture. We find that moving from German speaking regions in Switzerland to Latin speaking regions of Switzerland dramatically changes PL and ALMP. Moreover, crossing the language border also dramatically changes unemployment duration. This evidence is consistent with strong effects of culture on unemployment duration.

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