an apprenticeship degree, while an extra 30 percent has secondary studies. Finally, the incidence of unemployment is lowest in Bratislava and highest in Kosice, as can be seen from their share of all spells, 5 percent and 20 percent respectively.

57. The average spell duration is 10.42 months, and almost 60 percent of all spells end with a transition into private-sector employment. Also, 44 percent of all observations correspond to spells during which the individual received unemployment insurance benefits. It is important to distinguish this number from the percentage of unemployed individuals that, at a certain point in time, are receiving unemployment insurance. As was mentioned in Section C, this number is much smaller, about 25-30 percent since 1995.

58. There are some demographic differences between unemployment insurance recipients and non-recipients. In particular, there is a higher fraction of married, prime-aged, and midlevel education workers among the former. This group also exhibits a higher rate of previous employment experience, and, as we pointed out above, longer unemployment spells. However, they also have higher exit-to-employment rates: 65 percent, compared to 55 percent for non-recipients.

# **Labor Force Survey**

59. We also use data from the Labor Force Survey, administered by the Slovak Statistical Office on a quarterly basis since 1994. In particular, we use data for the years 1996 and 1999, together with the first two quarters of 2000. In each quarter, the Labor Force Survey sample contains approximately 10,000 households (about 0.1 percent of all Slovak households), or 30,000 individuals. The survey follows a 20 percent rotation scheme across every two consecutive quarters, which implies that we can trace individuals for a maximum of five quarters.

60. The fact that individuals are only observed for a limited period of time, together with the absence of retrospective questions in the survey, implies that, in order to obtain accurate information on benefit entitlement and recipiency, we need to impose additional conditions when constructing the sub-sample we will work with. In particular, we select only those individuals who (i) become unemployed during the survey period or who (ii) have been unemployed for less than three months at the time of the first interview. This way we follow individuals from the beginning of their unemployment spells and can correctly identify their recipiency status. This selection rule has the added advantage of allowing us to avoid stock sampling bias (i.e. over-representation of long spells).

61. The sample then contains 2,465 unemployed individuals, where the definition of unemployment accords with ILO standards. We observe a single spell per individual, which can be completed or censored, given that individuals remain in the sample for at most five quarters. Almost 50 percent of all (observed) spells last for less than three months, while about 4 percent last for more than a year (Table IX). This distribution differs substantially from the one presented on Table VII, in that the share of short (long) spells is much larger (smaller) in the Labor Force Survey than in the Unemployment Registry sample. This is primarily due to the sampling methodology used for the Labor Force Survey: since we only select those individuals that just became unemployed or that have been unemployed for a few months, and since we only observe these individuals for a limited period of time, their 16