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Research Paper IZA Discussion Papers 1623

State dependence in a multi-state model of employment dynamics

Authors

Publication date

01 Jun 2005

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 endogeneity 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 to 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.

Subjects

Labour Market, Unemployment, and Childbearing: Fertility

Links

http://ideas.repec.org/p/iza/izadps/dp1623.html

Notes

Series now available online; discussion paper

#508268


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