While worker flow analysis has grown in importance in many countries, Austria still lacks a specific longitudinal dataset as a prerequisite to perform similar analyses. For this reason, this article provides a coherent procedure to construct a longitudinal dataset based on the rotational panel structure of the Austrian quarterly LFS from 2004 to 2014. The procedure, which is available for researcher, is grounded on the discussion of several related and important issues inherent in constructing this sort of longitudinal data: First, it deals with the construction of the quarterly-matched dataset and the quality-of-measurement of several labour market variables. Second, the paper analyses non-response as a sample selection process, and shows that the selected (quarterly-matched) dataset causes biased estimates of worker flows. Third, the article proposes an iterative raking procedure to obtain survey weights as a bias-correcting device for any future analysis. Based on these adjustments, we present unbiased time-series of worker flows and transition rates, and conclude that the employment-unemployment margin is highly sensitive to economic shocks and that the Austrian labour market is additionally shaped by large movements within the participation margin. (authors' abstract) / Series: Department of Economics Working Paper Series

There is a growing literature studying unemployment dynamics by means of worker flow data between labor market states. This paper contributes to this literature stream by analyzing the dynamics of the Austrian unemployment rate applying novel worker flow data for 2005-2016. Our main results can be summarized along two dimensions: First, we show that worker flows between unemployment and inactivity are major determinants of unemployment fluctuations in Austria. Second, we show for the working-age population that the contribution of male worker flows to the overall variation of the unemployment rate is higher, but that this relation turns when it comes to the youth cohort. The gender differences are probably related to the early occupational and educational segregation of young men and women in Austria. The paper concludes by stressing a strong need for further empirical and theoretical research which aims to link structural differences in an economy with different responses to the business cycle. / Series: Department of Economics Working Paper Series