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The relation between wealth and labour market transitions: An empirical study for the Netherlands

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Author Info

  • Bloemen, H.G.

    (Tilburg University, Center for Economic Research)

Abstract

We study the relationship between wealth and labour market transitions. A lifecycle model, in which individuals are faced by uncertainty about the availability of jobs, serves as a basis for a reduced-form specification for the probabilities of labour market transitions, which depend on wealth according to the model. Theory implies a negative effect of wealth on the probability of becoming or staying employed. This implication is tested for in a reduced-from model of labour market transitions, in which we allow for random effects, initial conditions, and measurement error in wealth. Elasticities of transitions probabilities with respect to wealth are presented. Copyright © 2002 John Wiley & Sons, Ltd.

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1995-99.

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Date of creation: 1995
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Handle: RePEc:dgr:kubcen:199599

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Web page: http://center.uvt.nl

Related research

Keywords: Labour Market; Wealth; Life Cycles;

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References

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  1. Bloemen, H.G., 1992. "Job search theory, labour supply and unemployment duration," Discussion Paper 1992-50, Tilburg University, Center for Economic Research.
  2. Vassilis A. Hajivassiliou & Axel Borsch-Supan, 1990. "Smooth Unbiased Multivariate Probability Simulators for Maximum Likelihood Estimation of Limited Dependent Variable Models," Cowles Foundation Discussion Papers 960, Cowles Foundation for Research in Economics, Yale University.
  3. Richard Blundell & Thierry Magnac & Costas Meghir, 1996. "Savings and labour market transitions," IFS Working Papers W96/05, Institute for Fiscal Studies.
  4. John Rust, 1997. "Using Randomization to Break the Curse of Dimensionality," Econometrica, Econometric Society, vol. 65(3), pages 487-516, May.
  5. Alessie, Rob & Lusardi, Annamaria, 1997. "Saving and income smoothing: Evidence from panel data," European Economic Review, Elsevier, vol. 41(7), pages 1251-1279, July.
  6. Stancanelli, E.G.F., 1994. "The unemployed's financial resources and the probality of re-employment," Serie Research Memoranda 0047, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  7. Hotz, V Joseph & Kydland, Finn E & Sedlacek, Guilherme L, 1988. "Intertemporal Preferences and Labor Supply," Econometrica, Econometric Society, vol. 56(2), pages 335-60, March.
  8. Hansen, Lars Peter & Singleton, Kenneth J, 1982. "Generalized Instrumental Variables Estimation of Nonlinear Rational Expectations Models," Econometrica, Econometric Society, vol. 50(5), pages 1269-86, September.
  9. John Bound & David A. Jaeger & Regina Baker, 1993. "The Cure Can Be Worse than the Disease: A Cautionary Tale Regarding Instrumental Variables," NBER Technical Working Papers 0137, National Bureau of Economic Research, Inc.
  10. Stephen Zeldes, . "Optimal Consumption with Stochastic Income: Deviations from Certainty Equivalence," Rodney L. White Center for Financial Research Working Papers 20-86, Wharton School Rodney L. White Center for Financial Research.
  11. Michael P. Keane & Kenneth I. Wolpin, 1995. "The career decisions of young men," Working Papers 559, Federal Reserve Bank of Minneapolis.
  12. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-26, November.
  13. MaCurdy, Thomas E, 1983. "A Simple Scheme for Estimating an Intertemporal Model of Labor Supply and Consumption in the Presence of Taxes and Uncertainty," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(2), pages 265-89, June.
  14. Charlier, E., 1997. "Limited Dependent Variable Models for Panel Data," Open Access publications from Tilburg University urn:nbn:nl:ui:12-74022, Tilburg University.
  15. G. S. Maddala, 1987. "Limited Dependent Variable Models Using Panel Data," Journal of Human Resources, University of Wisconsin Press, vol. 22(3), pages 307-338.
  16. Chamberlain, Gary, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Wiley Blackwell, vol. 47(1), pages 225-38, January.
  17. Keane, Michael P & Wolpin, Kenneth I, 1994. "The Solution and Estimation of Discrete Choice Dynamic Programming Models by Simulation and Interpolation: Monte Carlo Evidence," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 648-72, November.
  18. Keane, Michael P & Runkle, David E, 1992. "On the Estimation of Panel-Data Models with Serial Correlation When Instruments Are Not Strictly Exogenous," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(1), pages 1-9, January.
  19. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
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Citations

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Cited by:
  1. Hans Bloemen & Elena Stancanelli, 2001. "Individual Wealth, Reservation Wages, and Transitions into Employment," Sciences Po publications info:hdl:2441/9704, Sciences Po.
  2. Martin Browning & Thomas F. Crossley & Eric Smith, 2003. "Asset Accumulation and Short Term Employment," CAM Working Papers 2003-02, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  3. Lorenzo Corsini, 2012. "Unemployment Insurance Schemes, Liquidity Constraints and Re-employment: A Three Country Comparison," Comparative Economic Studies, Palgrave Macmillan, vol. 54(2), pages 321-340, June.
  4. Bloemen, Hans G. & Stancanelli, Elena G.F., 2001. "Financial wealth, consumption smoothing, and income shocks due to job loss," Serie Research Memoranda 0036, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  5. Hans Bloemen, 2008. "Private Wealth and Job Exit at Older Age: a Random Effects Model," Tinbergen Institute Discussion Papers 08-025/3, Tinbergen Institute.
  6. Florent Fremigacciy & Antoine Terracol, 2009. "Subsidized temporary jobs: lock-in and stepping stone effects," Documents de recherche 09-10, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
  7. Hans G. Bloemen, 2007. "The Impact of Wealth on Job Exit Rates of Elderly Workers," Tinbergen Institute Discussion Papers 07-002/3, Tinbergen Institute.
  8. Lorenzo Corsini, 2011. "On Wealth, Unemployment Benefits and Unemployment Duration: some Evidence from Italy," Discussion Papers 2011/119, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  9. Hans Bloemen, 2008. "Private Wealth and Job Exit at Older Age: a Random Effects Model," Tinbergen Institute Discussion Papers 08-025/3, Tinbergen Institute.
  10. Bloemen, Hans, 2006. "The Impact of Wealth on Job Exit Rates of Elderly Workers," IZA Discussion Papers 2247, Institute for the Study of Labor (IZA).
  11. Tricia Gladden & Michelle Alexopoulos, 2004. "The Effects of Wealth, and Unemployment Benefits on Search Behavior and Labor Market Transitions," Econometric Society 2004 North American Summer Meetings 517, Econometric Society.

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