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State Dependence in a Multi-state Model of Employment

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Author Info
Victoria Prowse () (Nuffield College, Oxford University)

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Abstract

A multinomial choice framework is used to investigate the nature of women's transitions between full-time employment, part-time employment and non-employment. The stochastic framework allows time varying and time invariant unobserved preferences, and also controls for the possible endogenity of education, fertility and non-labor income. Significant positive true state dependence is found in both full-time and part-time employment. This finding is robust to the specification of unobserved preferences. The results are used the assess the dynamic effects of three temporary wage subsidies. All three policies have substantial effects on employment behavior for up to 6 years. However, obtaining a permanent increase in employment requires sustained or repeated interventions.

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File URL: http://www.nuffield.ox.ac.uk/economics/papers/2005/W20/prowse_nufwp1.pdf
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Publisher Info
Paper provided by Economics Group, Nuffield College, University of Oxford in its series Economics Papers with number 2005-W20.

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Length: 33 pages
Date of creation: 01 Aug 2005
Date of revision:
Handle: RePEc:nuf:econwp:0520

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Web page: http://www.nuff.ox.ac.uk/economics/

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Related research
Keywords: Dynamic labor supply Heterogeneity Multinomial choice State dependence.

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Find related papers by JEL classification:
C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Statistical Simulation Methods
C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models
J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion

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References listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Piacentini, Mario, 2008. "Migration Enclaves, Schooling Choices and Social Mobility," MPRA Paper 8376, University Library of Munich, Germany. [Downloadable!]
  2. Victoria Prowse, 2007. "Modeling Employment Dynamics with State Dependence and Unobserved Heterogeneity," Economics Series Working Papers 337, University of Oxford, Department of Economics. [Downloadable!]
  3. Peter Haan, 2007. "Intertemporal Labor Supply Effects of Tax Reforms," Discussion Papers of DIW Berlin 669, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  4. Peter Haan & Arne Uhlendorff, 2007. "Intertemporal Labor Supply and Involuntary Unemployment," IZA Discussion Papers 2888, Institute for the Study of Labor (IZA). [Downloadable!]
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