Analysis of Transition Data by the Minimum-Chi-Square Method: An Application to Welfare Spells in Belgium

Review of Economics and Statistics, Vol. 79, No. 3, August 1997

Posted: 22 Mar 1998

See all articles by Bart Cockx

Bart Cockx

Ghent University - Sherppa - Faculty of Economics and Business Administration; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute); IRES, Université Catholique de Louvain

Abstract

In this paper we analyze transition data by means of the minimum-chi-square (MCS) method instead of the more commonly used maximum-likelihood (ML) method. The analysis includes exits to multiple destinations and unmeasured heterogeneity. In the empirical application, turnover in the welfare system in Belgium is found to be very high. Median duration is 4.5 months for men and 7 months for women, although these figures overstate turnover in that exits out of welfare include those occurring as a consequence of recipients moving to another municipality while remaining on welfare.

JEL Classification: C30, C33, H53

Suggested Citation

Cockx, Bart L. W., Analysis of Transition Data by the Minimum-Chi-Square Method: An Application to Welfare Spells in Belgium. Review of Economics and Statistics, Vol. 79, No. 3, August 1997, Available at SSRN: https://ssrn.com/abstract=69452

Bart L. W. Cockx (Contact Author)

Ghent University - Sherppa - Faculty of Economics and Business Administration ( email )

Ghent, B-9000
Belgium

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IRES, Université Catholique de Louvain

Place Montesquieu, 3
Louvain-la-Neuve
Belgium

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