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Author: Yip, Chun Seng
Resulting in 2 citations.
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Yip, Chun Seng |
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Job Search and Labor Force Participation in Equilibrium: Theory and Estimation Working Paper, Department of Economics, University of Pennsylvania, November 2003. Also: http://www.econ.upenn.edu/~yipcs/talkjan04.pdf Cohort(s): NLSY79 Publisher: Department of Economics, University of Pennsylvania Keyword(s): Job Search; Labor Force Participation; Modeling; Quits Permission to reprint the abstract has not been received from the publisher. Recent empirical evidence suggests that an increasing number of working-age individuals have a weaker attachment to the labor force. Therefore when studying job search in frictional labor markets, it is increasingly important to model workers' participation and quit decisions as well. I develop an equilibrium model where workers determine participation/exit decisions as well as their job quit/acceptance rules. Unlike previous models, all transitions are the result of optimal decisions. The key features of the model are that being unemployed (U) entails a search cost compared to being out of the labor force (OLF), and workers face occasional shocks to their non-work alternatives, causing them to revise their labor market entry/exit and job accept/quit decisions. The model is structurally estimated using data on young women from the NLSY79. Despite data limitations arising from crucial unobserved market-entry and exit transitions, I am able to estimate the model. This is accomplished by modifying the likelihood contributions through the use of Bessel functions. The model estimates the magnitude of these hidden transitions. The model is used to assess and compare the effects of labor market policies targeted at the unemployed, with policies towards both unemployed and OLF. These policy simulations provide richer implications not possible with a model without endogenous participation. |
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Bibliography Citation
Yip, Chun Seng. "Job Search and Labor Force Participation in Equilibrium: Theory and Estimation." Working Paper, Department of Economics, University of Pennsylvania, November 2003. |
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Yip, Chun Seng |
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Job Search and Labor Force Participation in Equilibrium: Theory and Estimation Ph.D. Dissertation, University of Pennsylvania, 2004. DAI-A 65/06, p. 2312, Dec 2004 Cohort(s): NLSY79 Publisher: UMI - University Microfilms, Bell and Howell Information and Learning Keyword(s): Endogeneity; Job Search; Labor Economics; Labor Force Participation; Modeling; Quits; Welfare Recent empirical evidence suggests that an increasing number of working-age individuals have a weaker attachment to the labor force. However an important short-coming of much current work applying search models to frictional labor These are potentially significant omissions especially because search models are often applied to data and used to perform counterfactual policy experiments. I develop an equilibrium model where workers determine participation/exit decisions as well as their job quit/acceptance rules. Unlike previous models, all transitions are the result of optimal decisions. The key features of the model are that being unemployed entails a search cost compared to being out of the labor force, and workers face occasional shocks to their non-work alternatives, causing them to revise their labor market entry/exit and job accept/quit decisions. The model is structurally estimated using data on young women from the 1979 Youth Cohort of the National Longitudinal Survey of Youth (NLSY79). Despite data limitations arising from crucial unobserved market-entry and exit transitions, I am able to estimate the model. This is accomplished by modifying the likelihood contributions through the use of Bessel functions. The model estimates the magnitude of these hidden transitions and provides a more complete picture of the labor market movement than with many current models. The model is used to assess and compare the effects of labor market policies targeted at the unemployed, with policies towards both unemployed and nonparticipants in the labor force. These policy simulations suggest that tying welfare payments to search activity has very different consequences from welfare payments regardless of search status (unemployment payments vs. non-employment payments). These simulations provides a more thorough analysis of canonical labor market policy that is not possible with previous models without endogenous participation and quits. |
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Bibliography Citation
Yip, Chun Seng. Job Search and Labor Force Participation in Equilibrium: Theory and Estimation. Ph.D. Dissertation, University of Pennsylvania, 2004. DAI-A 65/06, p. 2312, Dec 2004. |