This paper first investigates the sensitivity of estimates of duration models to the specification of duration dependence. Using data from an experiment involving disadvantaged women in the U.S., we find that estimates of the parameters of hazard models are not sensitive to the way one models duration dependence as long as one uses a flexible functional form. We find that estimates of the expected duration in a state are insensitive to the way one models duration dependence if long spells are observed in the data, but that these are very sensitive to the specification when there are only relatively short spells in the data. We propose and implement alternative summary measures based on the median duration in a spell and show that these are quite robust to the specification of duration dependence.
- Duration models
- Duration of dependence
ASJC Scopus subject areas
- Economics and Econometrics
- Organizational Behavior and Human Resource Management