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Über dieses Buch

This volume consists of papers presented at a conference on labor mar­ ket theory held in August 1982 at Sandbjerg - a manor house situated in S0nderjylland owned by University of Aarhus. The conference was ar­ ranged to mark the start of a labor market research project utilizing the first Danish longitudinal data set. The conference was meant to present a survey of the recent developments within labor market theory where unemployment at a given time is seen as a result of flows of in­ dividuals between the various labor market states. Consequently, al­ most all papers deal with aspects of transitions on the labor market. The first paper by Andersen discusses from a statisticians point of view how it is possible to analyze longitudinal data on labor market dynamics using statistical models for multivariate counting processes. Models including general calendar time specific intensities and models specifying the distribution of spell lengths as well as their combina­ tions are included. Finally it is demonstrated how the effect of exo­ genous, endogenous, and other time dependent variables can be model­ led. This paper does also contain an example of the application of the model.



The Counting Process Approach to the Statistical Analysis of Labour Force Dynamics

It is discussed how it is possible to analyse longitudinal data on labour market dynamics using statistical models for multivariate counting processes. These include models with general calendar time specific intensities and models specifying the distribution of spell lengths as well as combinations of the two. It is demonstrated how the effect of (observable) exogenous and endogeneous variables can be modelled.
Per Kragh Andersen

Simultaneous Equations with Endogenous Hazards

Suppose that one samples unemployed job seekers and observes their current job search policy and their elapsed duration of search: this paper is a study of the econometric problems that arise in using such data to investigate inter-individual and inter-temporal differences in search policy and the effect of such policies on the probability of leaving unemployment. In particular we study the implications of the distinction between sampling the stock and sampling the flow of unemployed people and we propose a particular model. The theory is illustrated by some calculations using data on ‘reservation wages’ and elapsed durations reported by two samples of British unemployed people. These calculations are consistent with the job search model, but suggest that the effect of selectivity in prolonging unemployment for our samples was small.
Tony Lancaster, Andrew Chesher

The Distribution of Single-Spell Duration Data

This paper is concerned with the statistical analysis of single-spell duration data. However, many points also apply to the analysis of other duration data. The interest among econometricians into the analysis of single-spell duration data was greatly enhanced by a series of papers by Lancaster and Nickell (Lancaster (1979), Nickell (1979), Lancaster and Nickell (1980)). Since then there has been a considerable growth in the number of statistical tools as well as in their application, mainly in labor economics. However, there are a number of problems in the application of these methods to the kind of data usually available. The connection between the models proposed by Lancaster and Nickell and the data which are used to estimate them is less direct than in most econometric analyses. To be more precise, different aspects of the same data can be used to estimate the same model. For instance, Nickell estimated his model using observations on elapsed durations of unemployment, while Lancaster used data on residual durations obtained from a repeated survey. Each analysis used only part of the information contained in completed spells.
Geert Ridder

Steady States as Natural Rates in a Dynamic Discrete Choice Model of Labor Supply

In recent years economists have moved away from viewing unemployment as a stock concept. It is now popular to view unemployment at a given time as the result of flows of individuals between the various labor market states (employment, unemployment, and nonparticipation). The purpose of this study Is to provide a general framework in which these flows can be analyzed. This will then be used to estimate what we shall term the natural rates of both unemployment and nonparticipation for various groups.
Kenneth Burdett, Nicholas M. Kiefer, Dale T. Mortensen, George R. Neumann

Choice or Chance? A Structural Interpretation of Individual Labor Market Histories

Recently survival analysis has made its debut in econometrics as a technique for modeling the observed labor force experience of individuals over time. Although continuous-time theoretical models of optimal dynamic labor force participation are available, little use of them has been made in the empirical literature. Recent papers by Burdett et al.,(1982) by Flinn and Heckman (1982) and by Olsen and Parkas (1982) are exceptions. Burdett et al., develop a continuous-time Markov decision model of an Individual worker’s labor force participation decision problem and use the model to interpret their empirical estimates of what can be regarded as “reduced form” relationships between rates of transition between states ⤔employment, unemployment, and non-participation⤔ and worker characteristics. Flinn and Heckman present a different but related participation model and discuss the problem of empirically identifying its “structure.” Finally, Olsen and Farkas suggest an econometric method of estimating the “structure” of continuous-time Markov chain models. This paper makes three contributions. First, a general dynamic continuous-time discrete choice model is set down which includes those of all three papers as special cases. Second, the problem of identifying the structure of special cases of the model is studied.
Dale T. Mortensen, George R. Neumann

A Survival Analysis of Adult Male Black/White Labor Market Flows

Unemployment rates of black groups are roughly twice those of white groups, regardless of age, sex, and geographic location. Seeking to identify the labor market flows responsible for this differential, Marston [14] and Ehrenberg [4] use Current Population Survey gross flow data to compute average monthly flow probabilities among the states employment, unemployment, and nonparticipation. They find that blacks and other minorities are more likely to exit employment for unemployment, less likely to exit unemployment for employment, and less likely to successfully enter the labor force.
Stuart E. Weiner

Wages and Turnover: A Parametrization of the Job-Matching Model

Recent empirical work on turnover has emphasized job-matching as the major cause for job-change. Even where job-separations can ultimately be traced to a decline in the demand for the firm’s product, it is the poorly matched who are likely to separate from their jobs. More effort is needed, however, in bringing theory and econometrics closer together in this area. On the one hand, there has been no rigorous test of a matching model, and on the other, evidence has been interpreted as contrary to the matching model when in fact it is not.
Boyan Jovanovic

A Dynamic Model of Labor Management

A dynamic description of the labor market leads to replace the common view of a regular transaction between the labor supplier and the labor demander by the representation of a two-side decisional system in which the employer and the employee make sequential decisions as for the job contract.
Jean Marcel Dalbarade

Labor Market Policies and Differential Patterns of Unemployment in Sweden

The U.S. and Sweden differ sharply in unemployment levels and in labor market policies. During the 1970’s, Sweden experienced an unemployment rate of around two percent compared to a seven percent U.S. rate.1 In Sweden the central economic goal has been full employment. For over thirty years, Sweden has experimented with a wide array of labor market policies to promote full employment.2 Sweden’s experience with these programs offers U.S. policy makers the chance to evaluate their impact before implementing them in the U.S. labor market.
Linda Leighton, Siv Gustafsson

Household Labour Supply with Quantity Constraints

When household demand functions are estimated, it is customary and convenient to assume that individual agents can purchase the desired quantities of leisure or commodities at fixed prices. The possibility that the labour market, or other markets, might operate in such a way as to impose quantity constraints on the purchases of a household is thus ruled out.
Shelly Lundberg

Job Mobility and Wage Growth: A Study of Selection Rules and Rewards

The causes and consequences of labor mobility belong to the classical topics in labor economics. There is, first, the issue of the extent to which workers respond to perceived wage gains associated with job mobility. The adaptability of the labor market in this respect has obvious implications for the speed at which potential allocation gains can be realized. It is also clear that mobility between jobs is a device through which workers can improve their economic position; individual wage and income mobility is presumably to a large extent associated with job mobility. Hence, an understanding of life-cycle patterns of earnings may require knowledge of mobility over the life cycle as well.
Bertil Holmlund

Employment-Related Classifications in a Register Based Statistical System

Since 1976 employment classifications in Danish statistics have been made to a greater extent on the basis of informations collected from different administrative registers compared to the conventional survey/census method. The start was in 1971 but not until five years later the results were acceptable. The change in collecting method is the necessary basis for linking the unemployment statistics to the employment characteristics. In this paper it is explained how the employment related classifications are constructed from the statistical registers.
Finn Spieker

A Danish Longitudinal Data Base

This paper presents a new Danish longitudinal data set drawing on information contained in the public registers.
Niels Westergård-Nielsen


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