Econometrics of Individual Labor Market Transitions

50 Pages Posted: 5 Dec 2005

See all articles by Denis Fougère

Denis Fougère

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE); National Center for Scientific Research (CNRS); IZA Institute of Labor Economics

Thierry Kamionka

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE) ; National Center for Scientific Research (CNRS)

Date Written: November 2005

Abstract

This survey is devoted to the modelling and the estimation of reduced-form transition models, which have been extensively used and estimated in labor microeconometrics. The first section contains a general presentation of the statistical modelling of such processes using continuous-time (event-history) data. It also presents parametric and nonparametric estimation procedures, and focuses on the treatment of unobserved heterogeneity. The second section deals with the estimation of markovian processes using discrete-time panel observations. Here the main question is whether the discrete-time panel observation of a transition process is generated by a continuous-time homogeneous Markov process. After discussing this problem, we present maximum-likelihood and bayesian procedures for estimating the transition intensity matrix governing the process evolution. Particular attention is paid to the estimation of the continuous-time mover-stayer model, which is the more elementary model of mixed Markov chains.

Keywords: labor market transitions, markovian processes, mover-stayer model, unobserved heterogeneity

JEL Classification: C41, C51, J64

Suggested Citation

Fougere, Denis and Kamionka, Thierry, Econometrics of Individual Labor Market Transitions (November 2005). IZA Discussion Paper No. 1850, Available at SSRN: https://ssrn.com/abstract=866784

Denis Fougere (Contact Author)

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE) ( email )

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France
+33 1 4117 7713 (Phone)
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National Center for Scientific Research (CNRS)

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IZA Institute of Labor Economics

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Germany

Thierry Kamionka

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE) ( email )

15, Boulevard Adolphie PINARD
92245 Malakoff Cedex
France

National Center for Scientific Research (CNRS)

3, rue Michel-Ange
Paris cedex 16, 75794
France

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