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What Drives Worker Flows?

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  • Chew Lian Chua

    ()
    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Robert Dixon

    (Department of Economics, The University Melbourne)

  • G. C. Lim

    ()
    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

This paper applies a multi-state latent factor intensity model to worker flows to obtain insights about the determinants of entry and exit rates pertaining to various labour market states. The analysis shows that one activity factor underpins the decision to move from employment and from unemployment and this result may be of special interest to policy makers concerned with understanding the rate of departures from the pool of both the employed and (especially) the unemployed. The paper also shows how to estimate a non-linear state space model using a Gibbs sampler that encompasses a Metropolis-Hastings algorithm as well as the auxiliary particle filter to estimate the latent process. The advantage of the approach is that it provides a parsimonious and efficient way to obtain key information about behaviour in labour markets.

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Bibliographic Info

Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2007n34.

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Length: 31 pages
Date of creation: Nov 2007
Date of revision:
Handle: RePEc:iae:iaewps:wp2007n34

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Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
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  1. Dale T. Mortensen & Christopher A. Pissarides, 1993. "Job Creation and Job Destruction in the Theory of Unemployment," CEP Discussion Papers dp0110, Centre for Economic Performance, LSE.
  2. Robert Dixon & G.C. Lim, 2002. "Australian gross flows data: the labour force survey and the size of the population represented by the matched sample," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 5(1), pages 1-21, March.
  3. Robert Dixon & John Freebairn & Guay Lim, 2007. "Time-varying equilibrium rates of unemployment: an analysis with Australian data," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 10(4), pages 205-225, December.
  4. William Foster, 1981. "Gross Flows in the Australian Labour Market A First Look," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 14(4), pages 57-64.
  5. Robert E. Hall, 2005. "Employment Efficiency and Sticky Wages: Evidence from Flows in the Labor Market," NBER Working Papers 11183, National Bureau of Economic Research, Inc.
  6. Barbara Petrongolo & Christopher Pissarides, 2000. "Looking into the black box: a survey of the matching function," LSE Research Online Documents on Economics 2122, London School of Economics and Political Science, LSE Library.
  7. Siem Jan Koopman & André Lucas & André Monteiro, 2005. "The Multi-State Latent Factor Intensity Model for Credit Rating Transitions," Tinbergen Institute Discussion Papers 05-071/4, Tinbergen Institute, revised 04 Jul 2005.
  8. Robert E. Hall, 2005. "Employment Fluctuations with Equilibrium Wage Stickiness," American Economic Review, American Economic Association, vol. 95(1), pages 50-65, March.
  9. Robert Dixon & John Freebairn & Guay Lim, 2005. "An Examination of Net Flows in the Australian Labour Market," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 8(1), pages 25-42, March.
  10. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, vol. 95(1), pages 25-49, March.
  11. Simon Burgess & Hélène Turon, 2005. "Unemployment dynamics in Britain," Economic Journal, Royal Economic Society, vol. 115(503), pages 423-448, 04.
  12. Robert E. Hall, 2003. "Modern Theory of Unemployment Fluctuations: Empirics and Policy Applications," American Economic Review, American Economic Association, vol. 93(2), pages 145-150, May.
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Cited by:
  1. Ponomareva, Natalia & Sheen, Jeffrey, 2013. "Australian labor market dynamics across the ages," Economic Modelling, Elsevier, vol. 35(C), pages 453-463.

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