Past unemployment provides a cheap signal to employers regarding low labour productivity, with adverse consequences for the individuals concerned. ( The estimate of X may therefore partially reflect duration dependence in non-receipt, i.e. the fact that non-receipt probabilities maybe tend to be greater, the longer the spell of non-receipt. The factors influencing duration dependence in nonreceipt however need not be the same as the factors influencing duration dependence in receipt. Because unemployment leads to a substantial running down of financial assets and savings, past unemployment may affect the chances of finding re-employment possibilities.