Monte Carlo integration: An application to labour market states and transitions

This paper is concerned with the application of simulation estimation methods to micro-econometric labour market models. Based on a multi-period probit model for direct job changes and unemployment, estimators for the likelihood of individual employment histories are obtained by Monte Carlo integration and employed in a standard ML-procedure. The results for West German panel data suggest that dynamic effects are largely prevalent on labour markets and that in particular, past unemployment has drastic negative effects on future employment chances. Further, there are no indications that foreigners have a different labour market performance, nor that they are crowding natives out into unemployment.     

Adapting the optimal job search model for active labour market policy

Summary.  The structural theoretical framework for the analysis of duration of unemployment has been the optimal job search model. Recent advances in computational techniques in Bayesian inference now facilitate the analysis of incomplete data sets and the recovery of structural model parameters. The paper uses these methods on a UK data set of the long-term unemployed to illustrate how the optimal job search model can be adapted to model the effects of an active labour market policy. Without such an adaptation our conclusion is that the simple optimal job search model may not fit empirical unemployment data and could thus lead to a misspecified econometric model and incorrect parameter estimates.     

Unemployment duration and the length of entitlement periods for unemployment benefits: do the IAB employment subsample and the German Socio-Economic Panel yield the same results?*

Summary: We compare information on the length of unemployment spells contained in the IAB employment subsample (IABS) and in the German Socio-Economic Panel (GSOEP). Due to the lack of information on registered unemployment in the IABS, we use two proxies of unemployment in the IABS as introduced by Fitzenberger/Wilke (2004). The first proxy comprises all periods of nonemployment after an employment spell which contain at least one period with unemployment compensation transfers. The second proxy includes all episodes between two employment spells during which an individual continuously received unemployment benefits. Estimation of standard duration models indicates that conclusions drawn from the IABS and the GSOEP differ in many cases. While the GSOEP suggests that the hazard rate has a maximum at about 12 months of unemployment, the IABS results suggest that this maximum is at about 20 months. Contrary to our GSOEP results and contrary to many results based on the GSOEP found in the literature, we find a statistically significant association between longer maximum entitlement periods of unemployment benefits (‘Arbeitslosengeld’) and longer unemployment durations for men in the IABS. The results for women do not show such clear patterns. The large sample size of the IABS also allows to trace out statistically significant effects of characteristics such as regional and industry indicators, which is generally not possible in the relatively small GSOEP. * Acknowledgements: We would like to thank the editors of this special issue, Joachim M?ller and Bernd Fitzenberger, two anonymous referees, the participants of the ‘Statistische Woche 2004’ in Frankfurt (in particular Reinhard Hujer, Olaf Hübler and Gerd Ronning), seminar participants at the ZEW Mannheim (especially Fran?ois Laisney and Alexander Spermann) and Jennifer Hunt for their many helpful comments and suggestions. All remaining errors are our own. Financial support of the Deutsche Forschungsgemeinschaft (DFG) through the research project ‘Microeconometric modelling of unemployment durations under consideration of the macroeconomic situation’ is gratefully acknowledged. The data used in this paper were made available by the Institute for Employment Research (IAB) at the Federal Labour Office of Germany, Nürnberg, and the German Socio Economic Panel Study (GSOEP) at the German Institute for Economic Research (DIW), Berlin.     

To move or not to move to find a new job: spatial duration time model with dynamic covariate effects

The aim of this paper is to show the flexibility and capacity of penalized spline smoothing as estimation routine for modelling duration time data. We analyse the unemployment behaviour in Germany between 2000 and 2004 using a massive database from the German Federal Employment Agency. To investigate dynamic covariate effects and differences between competing job markets depending on the distance between former and recent working place, a functional duration time model with competing risks is used. It is build upon a competing hazard function where some of the smooth covariate effects are allowed to vary with unemployment duration. The focus of our analysis is on contrasting the spatial, economic and individual covariate effects of the competing job markets and on analysing their general influence on the unemployed's re-employment probabilities. As a result of our analyses, we reveal differences concerning gender, age and education. We also discover an effect between the newly formed and the old West German states. Moreover, the spatial pattern between the considered job markets differs.     

The microeconometric estimation of treatment effects—An overview

Summary The need to evaluate the performance of active labour market policies is not questioned any longer. Even though OECD countries spend significant shares of national resources on these measures, unemployment rates remain high or even increase. We focus on microeconometric evaluation which has to solve the fundamental evaluation problem and overcome the possible occurrence of selection bias. When using non-experimental data, different evaluation approaches can be thought of. The aim of this paper is to review the most relevant estimators, discuss their identifying assumptions and their (dis-)advantages. Thereby we will present estimators based on some form of exogeneity (selection on observables) as well as estimators where selection might also occur on unobservable characteristics. Since the possible occurrence of effect heterogeneity has become a major topic in evaluation research in recent years, we will also assess the ability of each estimator to deal with it. Additionally, we will also discuss some recent extensions of the static evaluation framework to allow for dynamic treatment evaluation. The authors thank Stephan L. Thomsen, Christopher Zeiss and one anonymous referee for valuable comments. The usual disclaimer applies.     

THE UNEMPLOYMENT RATE WHEN THE LABOUR MARKET IS MODELLED BY A MARKOV CHAIN

Assuming a Markov chain model for the labour market flow, we study it in its equilibrium state, We compare the observed and the theoretical unemployment rates. It is found that the observed unemployment rate approximates very closely the theoretical one. The mean and variance of the observed unemployment rate are computed. It is shown that its asymptotic distribution is normal.     

新生代农民工职业转换的影响因素分析——基于陕西省的调查数据

职业转换率是衡量职业流动的主要指标,也是考察社会阶层流动性和社会公平性的重要指标。以陕西省的实地调查数据为基础,运用交叉列联表和Logistic回归方法分析性别、年龄、户籍所在地、受教育程度、职业技能培训等因素对新生代农民工职业流动的影响。研究发现,性别、年龄、户籍所在地等个人因素对职业转换率没有显著影响,而受教育程度和是否接受职业技能培训等人力资本因素对职业转换率有显著的影响。在此基础上,提出增加新生代农民工职业技术教育培训机会的政策建议。     

Effects of future population trends on the labor market--analyses based on projections prepared by the Institute for Research on the Labor Market and Occupations

The effects of future population trends, such as demographic aging, declining fertility, and changes in migration, on the labor market in the Federal Republic of Germany are analyzed up to the year 2000. The study is based on projections prepared by the Institute for Research on the Labor Market and Occupations. Topics discussed include demographic trends as a cause of current unemployment, labor market phases and demographic trends since 1950, the projection model used, age-specific projections of the potential labor force, and labor market projections.     

Producing Monthly Estimates of Unemployment and Employment According to the International Labour Office Definition

Monthly unemployment statistics are available in Britain from a monthly count of the number of people claiming unemployment-related benefits. There has been considerable debate on the appropriateness of this measure. Unemployment and employment statistics are available quarterly from the Labour Force Survey (LFS), using International Labour Office (ILO) definitions. In this paper various options for producing monthly unemployment estimates according to the ILO definition are examined. Methods considered are a monthly LFS, calculating rolling averages from the quarterly LFS, and methods which combine LFS and claimant count data. It is proposed that a monthly LFS of 60 000 households be introduced which can produce monthly estimates of total unemployment and more detailed estimates quarterly. Such a survey would also fill an important gap by providing monthly employment statistics which are needed to provide a complete picture of the labour market.     

The transition from university to work: a multilevel approach to the analysis of the time to obtain the first job

The aim of the paper is to characterize the factors that determine the transition from university to work as well as to evaluate the effectiveness of universities and course programmes with respect to the labour market outcomes of their graduates. The study is focused on the analysis of the time to obtain the first job, taking into account the graduates' characteristics and the effects pertaining to course programmes and universities. For this a three-level discrete time survival model is used, where the logit of the hazard—conditionally on the random effects at course programme and university level—is a linear function of the covariates. The analysis is accomplished by using a large data set from a survey on job opportunities for the 1992 Italian graduates.     

Assessing the bias due to non-coverage of residential movers in the German Microcensus Panel: an evaluation using data from the Socio-Economic Panel

The German Microcensus (MC) is a large scale rotating panel survey over three years. The MC is attractive for longitudinal analysis over the entire participation duration because of the mandatory participation and the very high case numbers (about 200000 respondents). However, as a consequence of the area sampling that is used for the MC, residential mobility is not covered and consequently statistical information at the new residence is lacking in the MC sample. This raises the question whether longitudinal analyses, like transitions between labour market states, are biased and how different methods perform that promise to reduce such a bias. Similar problems occur also for other national Labour Force Surveys (LFS) which are rotating panels and do not cover residential mobility, see Clarke and Tate (2002). Based on data of the German Socio-Economic Panel (SOEP), which covers residential mobility, we analysed the effects of missing data of residential movers by the estimation of labour force flows. By comparing the results from the complete SOEP sample and the results from the SOEP, restricted to the non-movers, we concluded that the non-coverage of the residential movers can not be ignored in Rubin’s sense. With respect to correction methods we analysed weighting by inverse mobility scores and log-linear models for partially observed contingency tables. Our results indicate that weighting by inverse mobility scores reduces the bias to about 60% whereas the official longitudinal weights obtained by calibration result in a bias reduction of about 80%. The estimation of log-linear models for non-ignorable non-response leads to very unstable results.     

Unemployment, life satisfaction and retrospective error

Summary.  The paper compares current and 1-year retrospective data on unemployment in the German Socio-Economic Panel study. 13% of all unemployment spells are not reported 1 year later, and another 7% are misreported. The ratio of retrospective to current unemployment has increased in recent years and is related to salience of unemployment measures such as the loss of life satisfaction that is associated with unemployment. Individuals with weak labour force attachment, e.g. women with children or individuals who are close to retirement, have the greatest propensity to under-report unemployment retrospectively. The data are consistent with evidence on retrospective bias found by cognitive psychologists and survey methodologists.     

Gender and income inequality in the UK 1968–90: the feminization of earnings or of poverty?

This paper uses data from the Family Expenditure Survey for five selected years between 1968 and 1990 to examine trends in the income distribution in the UK, highlighting the role of women's labour force participation and earnings. The increased labour force participation of married women (especially mothers of young children in the 1980s) made a greater contribution to the decline of the 'traditional' male breadwinner family than the increased number of lone parents. The lower half of the distribution of weekly earnings became increasingly dominated by women. Though women's weekly earnings remained low relative to men's, the increase in their participation meant that, over the period, an increased share of family income came from women's labour market income: in 1990 nearly a quarter of the income of families with children came from women's earnings. Women's earnings were an important factor in keeping families out of poverty. There was no trend towards increasing feminization of poverty over the sample period. Adult women were somewhat more likely to be poor than adult men were, but female-headed families were very much more likely to be in poverty, and much more dependent on state benefits, than male-headed families were. Women's increased role in the labour market affected those in male-headed families more than those in female-headed families. Alongside a broad tendency for women's earnings to reduce poverty and inequality, there is evidence that the female population has become more economically polarized.     

A spatial analysis on Italian unemployment differences

Using spatial econometric models, this paper focuses attention on the spatial structure of provincial unemployment disparities of Italian provinces for the year 2003. On the basis of findings from the economic literature and of the available socio-economic data, various model specifications including supply- and demand-side variables are tested. Further we use ESDA analysis as equivalent to integration analysis on time series; therefore it is applied on each variable, dependent and independent, involved in the statistical model. The suggestions of ESDA lead us to the most adequate statistical model, which estimates indicate that there is a significant degree of neighbouring effect (i.e. positive spatial correlation) among labour markets at the provincial level in Italy; this effect is present notwithstanding we controlled for local characteristics. The unemployment shows a polarized spatial pattern that is strongly connected to labour demand and to a much lesser extent to the share of young population and economic structural composition.     

Keeping Time: An Analysis of Errors in the Measurement of Unemployment Duration

This study uses longitudinal microdata from the Current Population Survey to examine the consistency with which unemployment duration is reported. An estimate of measurement error is proposed and analyzed. A significant negative relationship is found between the initial month's unemployment duration and the reported change between surveys. On average, persons who begin spells of unemployment in the second month report durations greater than the actual time elapsed. Overall, the average duration of unemployment in this sample may be overstated by at least two weeks. A brief discussion of some implications for empirical labor market research concludes the article.     

劳动力市场匹配效率的影响因素研究

当前就业难、用工荒并存的重要原因是劳动力市场不健全导致匹配效率低。本文基于面板数据,利用自适应Lasso方法对我国劳动力市场匹配效率的影响因素进行实证研究。研究发现,技工学校等职业培训机构、人才市场等职业市场机构的发展对劳动力市场匹配效率有显著影响,相对于需求方而言,提高匹配效率应更多从供给侧入手,这是根本之策。应整合优化职业教育资源,提高劳动力质量和适用性,更好地满足加快建设创新型国家、全面建设现代化经济体系的需要。     

Unemployed and their caseworkers: should they be friends or foes?

Summary.  In many countries, caseworkers in public employment offices have dual roles of counselling and monitoring unemployed people. These roles often conflict, which results in important caseworker heterogeneity: some consider providing services to their clients and satisfying their demands as their primary task. However, others may pursue their own strategies, even against the will of the unemployed person. They may assign jobs and labour market programmes without the consent of the unemployed person. On the basis of a very detailed linked jobseeker–caseworker data set for Switzerland, we investigate the effects of caseworkers' co-operativeness on the probabilities of employment of their clients. Modified statistical matching methods reveal that caseworkers who place less emphasis on a co-operative and harmonic relationship with their clients increase their chances of employment in the short and medium term.     

Choosing between alternative classification criteria to measure the labour force state

Summary.  Labour force counting relies on general guidelines that are set by the International Labour Office to classify individuals into three labour force states: employment, unemployment and inactivity. However, the resulting statistics are known to be sensitive to slight variations in operational definitions which are prima facie consistent with the general guidelines. We consider two interpretations of the general guidelines, operationalized by the criterion that is currently followed by Eurostat and a criterion that was followed by the Italian Statistical Office up to 1992. After showing that the labour force statistics resulting from the two criteria differ considerably, we compare individuals whose classification depends on the criterion that is adopted with individuals whose classification is common between criteria to study the boundary between unemployment and inactivity. An application of our strategy is presented using data from the Italian Labour Force Survey, painting a picture neatly against the criterion that is currently followed by Eurostat.     

Some practical issues in the evaluation of heterogeneous labour market programmes by matching methods

Summary.  Recently several studies have analysed active labour market policies by using a recently proposed matching estimator for multiple programmes. Since there is only very limited practical experience with this estimator, this paper checks its sensitivity with respect to issues that are of practical importance in this kind of evaluation study. The estimator turns out to be fairly robust to several features that concern its implementation. Furthermore, the paper demonstrates that the matching approach per se is no panacea for solving all the problems of evaluation studies, but that its success depends critically on the information that is available in the data. Finally, a comparison with a bootstrap distribution provides some justification for using a simplified approximation of the distribution of the estimator that ignores its sequential nature.     

Employment, family union and childbearing decisions in Great Britain

Summary.  The paper investigates the life-cycle relationship of work and family life in Britain based on the British Household Panel Survey. Using hazard regression techniques we estimate a five-equation model, which includes birth events, union formation, union dissolution, employment and non-employment events. We find that transitions in and out of employment for men are relatively independent of other transitions. In contrast, there are strong links between employment of females, having children and union formation. By undertaking a detailed microsimulations analysis, we show that different levels of labour force participation by females do not necessarily lead to large changes in fertility events. Changes in union formation and fertility events, in contrast, have larger effects on employment.