IDEAS home Printed from https://ideas.repec.org/p/nuf/econwp/0520.html
   My bibliography  Save this paper

State Dependence in a Multi-state Model of Employment

Author

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.

Suggested Citation

  • Victoria Prowse, 2005. "State Dependence in a Multi-state Model of Employment," Economics Papers 2005-W20, Economics Group, Nuffield College, University of Oxford.
    • Handle: RePEc:nuf:econwp:0520
    as

    Download full text from publisher

    File URL: http://www.nuffield.ox.ac.uk/economics/papers/2005/W20/prowse_nufwp1.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rendtel, Ulrich & Kaltenborn, Ulrich, 2004. "The stability of simulation based estimation of the multiperiod multinominal probit model with individual specific covariates," Discussion Papers 2004/5, Free University Berlin, School of Business & Economics.
    2. Metcalf, David, 1999. "The Low Pay Commission and the National Minimum Wage," Economic Journal, Royal Economic Society, vol. 109(453), pages 46-66, February.
    3. Alison L. Booth & Stephen P. Jenkins & Carlos Garcia Serrano, 1999. "New Men and New Women? A Comparison of Paid Work Propensities from a Panel Data Perspective," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(2), pages 167-197, May.
    4. Keane, Michael P, 1994. "A Computationally Practical Simulation Estimator for Panel Data," Econometrica, Econometric Society, vol. 62(1), pages 95-116, January.
    5. Jacob Mincer & Solomon Polachek, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, in: Marriage, Family, Human Capital, and Fertility, pages 76-110, National Bureau of Economic Research, Inc.
    6. Geweke, John & Keane, Michael P & Runkle, David, 1994. "Alternative Computational Approaches to Inference in the Multinomial Probit Model," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 609-632, November.
    7. 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.
    8. McFadden, Daniel, 1989. "A Method of Simulated Moments for Estimation of Discrete Response Models without Numerical Integration," Econometrica, Econometric Society, vol. 57(5), pages 995-1026, September.
    9. Stephen Knights & Mark N. Harris & Joanne Loundes, 2002. "Dynamic Relationships in the Australian Labour Market: Heterogeneity and State Dependence," The Economic Record, The Economic Society of Australia, vol. 78(242), pages 284-298, September.
    10. Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
    11. Hajivassiliou, Vassilis A. & Ruud, Paul A., 1986. "Classical estimation methods for LDV models using simulation," Handbook of Econometrics, in: R. F. Engle & D. McFadden (ed.), Handbook of Econometrics, edition 1, volume 4, chapter 40, pages 2383-2441, Elsevier.
    12. Zvi Eckstein & Kenneth I. Wolpin, 1989. "Dynamic Labour Force Participation of Married Women and Endogenous Work Experience," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(3), pages 375-390.
    13. repec:bla:scandj:v:91:y:1989:i:2:p:371-96 is not listed on IDEAS
    14. Vassilis A. Hajivassiliou & Daniel L. McFadden, 1998. "The Method of Simulated Scores for the Estimation of LDV Models," Econometrica, Econometric Society, vol. 66(4), pages 863-896, July.
    15. Hajivassiliou, Vassilis & McFadden, Daniel & Ruud, Paul, 1996. "Simulation of multivariate normal rectangle probabilities and their derivatives theoretical and computational results," Journal of Econometrics, Elsevier, vol. 72(1-2), pages 85-134.
    16. repec:bla:econom:v:47:y:1980:i:187:p:247-83 is not listed on IDEAS
    17. Hausman, Jerry A & Wise, David A, 1979. "Attrition Bias in Experimental and Panel Data: The Gary Income Maintenance Experiment," Econometrica, Econometric Society, vol. 47(2), pages 455-473, March.
    18. Heckman, James J & Willis, Robert J, 1977. "A Beta-logistic Model for the Analysis of Sequential Labor Force Participation by Married Women," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 27-58, February.
    19. repec:bla:ecorec:v:78:y:2002:i:242:p:284-98 is not listed on IDEAS
    20. Geweke, John F. & Keane, Michael P. & Runkle, David E., 1997. "Statistical inference in the multinomial multiperiod probit model," Journal of Econometrics, Elsevier, vol. 80(1), pages 125-165, September.
    21. Blank, Rebecca M, 1989. "The Role of Part-Time Work in Women's Labor Market Choices over Time," American Economic Review, American Economic Association, vol. 79(2), pages 295-299, May.
    22. repec:bla:obuest:v:61:y:1999:i:2:p:167-97 is not listed on IDEAS
    23. Narendranathan, Wiji & Elias, Peter, 1993. "Influences of Past History on the Incidence of Youth Unemployment: Empirical Findings for the UK," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(2), pages 161-185, May.
    24. Burdett, Kenneth & Taylor, Mark P., 1994. "Semi-Markov and Markov labour histories," ISER Working Paper Series 1994-27, Institute for Social and Economic Research.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Victoria Prowse, 2012. "Modeling Employment Dynamics With State Dependence and Unobserved Heterogeneity," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 30(3), pages 411-431, April.
    2. Nisar Ahmad & Rayhaneh Esmaeilzadeh, 2009. "Immigrant-Native Differences in Earnings Mobility Processes: Evidence from Canadian and Danish Data," Economics Working Papers 2009-13, Department of Economics and Business Economics, Aarhus University.
    3. Piacentini, Mario, 2008. "Migration Enclaves, Schooling Choices and Social Mobility," MPRA Paper 8376, University Library of Munich, Germany.
    4. Torben M. Andersen & Michael Svarer, 2007. "Flexicurity: Labour Market Performance in Denmark," CESifo Economic Studies, CESifo Group, vol. 53(3), pages 389-429, September.
    5. Anna Kurowska & Michal Myck & Katharina Wrohlich, 2012. "Family and Labor Market Choices: Requirements to Guide Effective Evidence-Based Policy," Discussion Papers of DIW Berlin 1234, DIW Berlin, German Institute for Economic Research.
    6. Peter Haan, 2006. "Slowly, but Changing: How Does Genuine State Dependence Affect Female Labor Supply on the Extensive and Intensive Margin," JEPS Working Papers 06-002, JEPS.
    7. Nisar Ahmad & Rayhaneh Esmaeilzadeh & J?rgen Hansen, 2014. "Immigrant-Native Differences in Earnings Mobility Processes," Review of Economics & Finance, Better Advances Press, Canada, vol. 4, pages 13-32, Feburary.
    8. repec:diw:diwwpp:dp538 is not listed on IDEAS
    9. Peter Haan & Arne Uhlendorff, 2013. "Intertemporal labor supply and involuntary unemployment," Empirical Economics, Springer, vol. 44(2), pages 661-683, April.
    10. repec:diw:diwwpp:dp669 is not listed on IDEAS
    11. Nisar Ahmad, 2014. "State Dependence in Unemployment," International Journal of Economics and Financial Issues, Econjournals, vol. 4(1), pages 93-106.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Prowse, Victoria L., 2005. "State Dependence in a Multi-State Model of Employment Dynamics," IZA Discussion Papers 1623, Institute of Labor Economics (IZA).
    2. Troske, Kenneth R. & Voicu, Alexandru, 2010. "Joint estimation of sequential labor force participation and fertility decisions using Markov chain Monte Carlo techniques," Labour Economics, Elsevier, vol. 17(1), pages 150-169, January.
    3. Andreas Ziegler, 2007. "Simulated classical tests in multinomial probit models," Statistical Papers, Springer, vol. 48(4), pages 655-681, October.
    4. Gould, Brian W. & Dong, Diansheng, 2000. "The Decision Of When To Buy A Frequently Purchased Good: A Multi-Period Probit Model," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-17, December.
    5. Kerem Tuzcuoglu, 2019. "Composite Likelihood Estimation of an Autoregressive Panel Probit Model with Random Effects," Staff Working Papers 19-16, Bank of Canada.
    6. Ziegler, Andreas, 2001. "Simulated z-tests in multinomial probit models," ZEW Discussion Papers 01-53, ZEW - Leibniz Centre for European Economic Research.
    7. Troske, Kenneth & Voicu, Alexandru, 2009. "The Effect of Children on the Level of Labor Market Involvement of Married Women: What is the Role of Education?," IZA Discussion Papers 4074, Institute of Labor Economics (IZA).
    8. Victoria Prowse, 2012. "Modeling Employment Dynamics With State Dependence and Unobserved Heterogeneity," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 30(3), pages 411-431, April.
    9. Inkmann, Joachim, 2000. "Misspecified heteroskedasticity in the panel probit model: A small sample comparison of GMM and SML estimators," Journal of Econometrics, Elsevier, vol. 97(2), pages 227-259, August.
    10. Michael P. Keane, 2013. "Panel data discrete choice models of consumer demand," Economics Papers 2013-W08, Economics Group, Nuffield College, University of Oxford.
    11. Nisar Ahmad, 2014. "State Dependence in Unemployment," International Journal of Economics and Financial Issues, Econjournals, vol. 4(1), pages 93-106.
    12. Yannis M. Ioannides & Vassilis A. Hajivassiliou, 2007. "Unemployment and liquidity constraints," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(3), pages 479-510.
    13. John Geweke & Joel Horowitz & M. Hashem Pesaran, 2006. "Econometrics: A Bird’s Eye View," CESifo Working Paper Series 1870, CESifo.
    14. Maruyama, Shiko, 2014. "Estimation of finite sequential games," Journal of Econometrics, Elsevier, vol. 178(2), pages 716-726.
    15. Zvi Eckstein & Osnat Lifshitz, 2011. "Dynamic Female Labor Supply," Econometrica, Econometric Society, vol. 79(6), pages 1675-1726, November.
    16. Taehyun Ahn, 2010. "Employment Dynamics of Married Women and the Role of Part-Time Work: Evidence from Korea," Working Papers 1003, Nam Duck-Woo Economic Research Institute, Sogang University (Former Research Institute for Market Economy).
    17. Lee, Lung-Fei, 1997. "Simulated maximum likelihood estimation of dynamic discrete choice statistical models some Monte Carlo results," Journal of Econometrics, Elsevier, vol. 82(1), pages 1-35.
    18. Daniel Ackerberg, 2009. "A new use of importance sampling to reduce computational burden in simulation estimation," Quantitative Marketing and Economics (QME), Springer, vol. 7(4), pages 343-376, December.
    19. Ricardo A. Daziano & Martin Achtnicht, 2014. "Forecasting Adoption of Ultra-Low-Emission Vehicles Using Bayes Estimates of a Multinomial Probit Model and the GHK Simulator," Transportation Science, INFORMS, vol. 48(4), pages 671-683, November.

    More about this item

    Keywords

    Dynamic labor supply; Heterogeneity; Multinomial choice; State dependence.;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nuf:econwp:0520. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Maxine Collett (email available below). General contact details of provider: https://www.nuffield.ox.ac.uk/economics/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.