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The Analysis of Transition Data by the Minimum Chi-Square Method. An Application to Welfare Spells in Belgium

Author

Listed:
  • Cockx, Bart

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

In this paper we analyse transition data by means of the minimum chi-square (MCS) method in stead of the more commonly used maximum likelihood (ML) method. The method requires a very large dataset with relatively little information on determining factors. If such data are available, the MCS method is to be the estimation procedure of choice, because it is more robust than the ML method and it has a lower mean square error for small sample sizes. The latter property is shown to be particularly relevant if one is interested in the estimation of the tail of the duration distribution. The analysis includes exists to multiple destinations and unmeasured heterogeneity. In the empirical application turnover in the welfare system is found to be very high in Belgium. Median duration is 4.5 months for men and 7 months for women. These figures overstate turnover in that exits out of welfare include those occurring as a consequence of recipients moving to another municipality while remaining on welfare.

Suggested Citation

  • Cockx, Bart, 1990. "The Analysis of Transition Data by the Minimum Chi-Square Method. An Application to Welfare Spells in Belgium," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1995008, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 00 Mar 1995.
  • Handle: RePEc:ctl:louvir:1995008
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    Citations

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    Cited by:

    1. Vandenberghe Vincent, 2003. "Leaving teaching in the French-Speaking Community of Belgium: a duration analysis," Public Economics 0308003, EconWPA.
    2. Cockx, Bart & Ridder, Geert, 2001. "Social Employment of Welfare Recipients in Belgium: An Evaluation," Economic Journal, Royal Economic Society, vol. 111(470), pages 322-352, April.
    3. V. Vandenberghe, 2000. "Leaving Teaching in the French-Speaking Community of Belgium: A Duration Analysis," Education Economics, Taylor & Francis Journals, vol. 8(3), pages 221-239.
    4. Vandenberghe Vincent, 2003. "Leaving teaching in the French-Speaking Community of Belgium: a duration analysis," Public Economics 0308001, EconWPA, revised 21 Aug 2003.

    More about this item

    Keywords

    duration analysis; provision and effects of welfare programs;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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