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Transition Models With Measurement Errors

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Author Info

  • Thierry Magnac
  • Michael Visser

Abstract

In this paper, we estimate a transition model that allows for measurement errors in the data. The measurement errors arise because the survey design is partly retrospective, so that individuals sometimes forget or misclassify their past labor market transitions. The observed data are adjusted for errors via a measurement-error mechanism. The parameters of the distribution of the true data, and those of the measurement-error mechanism are estimated by a two-stage method. The results, based on the 1990-1992 French labor force survey, show that neglecting measurement errors leads to an underestimation of the average durations spent in labor market states. The estimates of some important transition probabilities between states are also biased by the measurement errors. © 1999 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/003465399558229
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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 81 (1999)
Issue (Month): 3 (August)
Pages: 466-474

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Handle: RePEc:tpr:restat:v:81:y:1999:i:3:p:466-474

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Cited by:
  1. Annette Bergemann & Bernd Fitzenberger & Stefan Speckesser, 2009. "Evaluating the dynamic employment effects of training programs in East Germany using conditional difference-in-differences," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(5), pages 797-823.
  2. Olivier Blanchard & Augustin Landier, 2001. "The Perverse Effects of Partial Labor Market Reform: Fixed Duration Contracts in France," NBER Working Papers 8219, National Bureau of Economic Research, Inc.
  3. Sullivan, Paul, 2006. "Estimation of an Occupational Choice Model when Occupations are Misclassified," MPRA Paper 862, University Library of Munich, Germany.
  4. repec:spo:wpecon:info:hdl:2441/53r60a8s3kup1vc9je5h30d2n is not listed on IDEAS
  5. Pauline Givord, 2011. "Essay on Four Issues in Public Policy Evaluation," Sciences Po publications info:hdl:2441/53r60a8s3ku, Sciences Po.
  6. Jean-Olivier Hairault & Thomas Le Barbanchon & Thepthida Sopraseuth, 2012. "The Cyclicality of the Separation and Job Finding Rates in France," Working Papers 2012-22, Centre de Recherche en Economie et Statistique.
  7. van den Berg, Gerard J & van der Klaauw, Bas, 2000. "Combining Micro and Macro Unemployment Duration Data," CEPR Discussion Papers 2494, C.E.P.R. Discussion Papers.
  8. O’NEILL, Donal & SWEETMAN, Olive & VAN DE GAER, Dirk, . "The effects of measurement error and omitted variables when using transition matrices to measure intergenerational mobility," CORE Discussion Papers RP -1962, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  9. Shuaizhang Feng & Yingyao Hu, 2012. "Misclassification Errors and the Underestimation of the U.S. Unemployment Rate," Economics Working Paper Archive 595, The Johns Hopkins University,Department of Economics.
  10. O Blanchard & A Landier, 2002. "The Perverse Effects of Partial Labour Market Reform: fixed--Term Contracts in France," Economic Journal, Royal Economic Society, vol. 112(480), pages F214-F244, June.

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