Agriculture: Transition Buffer or Black Hole? A Three-State Model of Employment Dynamics
48 Pages Posted: 7 Feb 2003
Date Written: December 2002
We analyze the effect of land reform legislation on labor market dynamics in the Romanian economy. We show that the agricultural sector, a source of precarious employment, has become an absorbing state for certain categories of workers who lost their jobs in the nonagricultural sector. A random utility model is used to represent individuals' sequential labor market decisions. The resulting multivariate probit model is estimated using Markov chain Monte Carlo methods.
Keywords: Labor Force Participation, Three-state Dynamic Model, Multivariate Probit, Markov Chain Monte Carlo, Transition Economy, Land Reform
JEL Classification: C11, C15, C33, C35, J23
Suggested Citation: Suggested Citation