FACTORS AFFECTING THE

UNEMPLOYMENT SPELL
OF CEM-UPLB GRADUATES
Adviser: Prof. Rowena A. Dorado
Reader: Prof. Rodger M. Valientes
Introduction
• Unemployment spell is a period that starts
when a person look for a job and ends when
the person got hired or leave the labor market

Unemployment spell affects:

– the aggregate unemployment rate of the country
(Corak 1996)
– Psychological and physiological well- being of an
individual (McClellan & MacDonald 1998)
Objectives
• General objective:
 to determine the factors affecting unemployment spell of
the 2014 and 2015 graduates from the CEM-UPLB

• Specific objectives:
✓ To determine average unemployment spell among graduates of
College of Economics and Management.
✓ To identify whether there is a direct relationship between the
General Weighted Average (GWA) and unemployment spell,
✓ To determine if there is a difference between the
unemployment spell of men and women
✓ To determine if the graduates get the job that matches their
degree program.
Review of Related Literature

• The average grade positively affect the job search

– (Jensen & Westergard-Nielsen 1987)

• The higher the educational attainment of an individual,

the shorter his or her unemployment spell is.
– (Abel, et. Al 2014; Khan & Mushtaq 2012; Palumbo
2010; Zhou 2003)
Review of Related Literature

• Asian women had shorter spell than Asian men.

– (Palumbo 2010)

• In China, female had lower unemployment spell

than male
– (Fan & Kong 2011; Kong 2011)

• In the Philippines, male had shorter spell than

female.
(de Jesus & Mapa 2015)
Review of Related Literature

• The reservation wage directly affects the unemployment

spell.
– (Kahraman 2011; Katz & Meyer 1998)

• When the offer is lower than the reservation wage, job

seeker tends to reject the offer and look for more
– (Kruger & Muller 2013)

• In US, higher reservation wages lead to a longer duration

of unemployment.
– (Wolpin 1987)
Framework

• The Job Search Theory

– explains the transition from unemployment to employment
– Reservation wage, Job opportunities, Information
• (Borjas, 2005; De Jesus & Mapa, 2015)
• Human Capital Investment
– investment which enhances the capability and knowledge which increases
his or her productivity potential.
– Investing in information about the labor market.
• (Schultz, 1961; Mincer, 1974; Becker,1975).
• Signaling Theory
– Education ‘signals’ productivity to the labor market.
– Signaling theory suggest the labor market hire people who has been
able to complete a college degree.
• (Spence, 1973; Arrow, 1973; Stiglitz, 1975).
Framework
Conceptual Framework
Methodology

Data
The study used primary data.
Survey

Method of Analysis
Regression analysis: Ordinary
Least Square
 Methodology

US = βo + β1GWA + β2JM + β3RW + β4Gender + ε

• US - Unemployment spell
• GWA -General Weighted Average of the respondents
obtained in College.
• JM -dummy variable if the job ‘matched’ the course
• RW -Reservation wage
• Gender - a dummy variable for the gender of the
respondent
• ε -Error term
Result and Discussion
Percentage distribution of male and female respondents.

Male Female Total

Course
(n=32) (n=93) (n=125)

26% 74%
All 100%
(32) (93)

33% 67%
BS Agribusiness Management 100%
(12) (24)
20% 80%
BS Agricultural Economics 100%
(10) (39)
25% 75%
BS Economics 100%
(10) (30)
Result and Discussion
Percentage distribution of respondent’s job per sector

Respondent's sector ABM AGECON ECON TOTAL

Accountancy, banking and finance. 8.8 6.4 16 31.2
Environment and agriculture 7.2 9.6 1.6 18.4
Research and Development 0 7.2 4 11.2
Sales and Marketing 1.6 5.6 3.2 10.4
Business, consulting and management 4.8 0.8 2.4 8
Public services and administration 1.6 4.8 0.8 7.2
Transport and logistics 2.4 0 1.6 4
Manufacturing and production 1.6 0.8 0.8 3.2
Academe 0 0.8 0.8 1.6
Government 0 0.8 0.8 1.6
Health 0 1.6 0 1.6
Recruitment and Human Resources 0.8 0.8 0 1.6
Total 28.8 39.2 32 100
Result and Discussion

Means and Standard Deviations of the Variables.

Variable Mean Std. Dev. Min Max

Unemployment spell
(in days) 53.992 41.71843 1 203

General Weighted Average 2.2128 0.386437 1.38 3.5

Reservation wage 18220 3876.834 8500 40000

sex (Dummy Variable)
Job match (Dummy Variable)
Result and Discussion
Percentage distribution of unemployment spell per degree program.

Unemployment
ABM AGECON ECON Total (%)
spell (in days)
1-15 7.2 5.6 4 16.8
16-30 2.4 7.2 6.4 16
31-45 4 7.2 7.2 18.4
46-60 2.4 4.8 3.2 10.4
61-75 4.8 4 4 12.8
76-90 1.6 2.4 0.8 4.8
91-105 1.6 4 1.6 7.2
106-120 2.4 4 1.6 8
121-135 0 0 2.4 2.4
136-150 0.8 0 0 0.8
166-180 0 0 0.8 0.8
196-210 1.6 0 0 1.6
Total 28.8 39.2 32 100
Result and Discussion

Reservation Wage
25000

19794.44333
20000 19000

15000
15000

10000

5000

GWA
Result and Discussion
Distribution of respondents and determinants in accepting job offers.

Job satisfaction. 66

52.80%
Job matched the skills. 37 29.60%

Job location 35 28.00%

High salary 32 25.60%

As a fresh graudate, choosing a job was not

40 32.00%
much of an option.

To have a job. 15 12.00%

Others 22 17.60%

0 10 20 30 40 50 60 70

Number of Respondents Percentage

Regression Result
Robust
Variables Coefficient Standard Error P>t

GWA 14.71293 8.160773 0.074*

Sex 9.814346 8.369036 0.243
Job match 5.49835 7.37789 0.458
Reservation wage 0.003154 0.0008781 0.000**

Constant -45.64371 26.1617 0.084

** 1% significant Prob>F= 0.0029
R-squared =0.1127
*10% significant
Summary and Conclusion

• Reservation wage and GWA significantly affect

the unemployment spell which was in line
with the Job search theory.

• Gender and the job match had no significant

effect on the spell of the respondents.
Summary and Conclusion

• Small sample size and limited to CEM Graduates

• Some other factor was not considered.
– the work experience during college
– household income of the respondents.
– The number of companies the respondent had
applied for and the number of the times the
respondents
 Chart Title
25000

20000

15000

10000

5000

0
1.00-1.24 1.25-1.49 1.50-1.74 1.75-1.99 2.00-2.24 2.25-2.49 2.50-2.74 2.75-2.99 3.00-3.24 3.25-3.49 3.50-3.74
ABM AGECON ECON Total Linear (Total)
Result and Discussion

Reservation wage (in pesos)

GWA among 2.00 or

courses higher Below 2.00 Average spell
19,891.3 17,500 18,875
BS ECON

17,371.43 16,892.86 17,234.69

BS AGECON

18,979.17 18,541.67 18,833.33

BS ABM

18,548.78 17,593.02 18,220

TOTAL