A general methodology to measure labour market dynamics

Davide Fiaschi*, Cristina Tealdi

*Corresponding author for this work

Research output: Working paper

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Abstract

We propose a general methodology to measure labour market dynamics, inspired by the search and matching framework, based on the estimate of the transition rates between labour market states. We show how to estimate instantaneous transition rates starting from discrete time observations provided in longitudinal datasets, allowing for any number of states. We illustrate the potential of such methodology using Italian labour market data. First, we decompose the unemployment rate fluctuations into inflow and outflow driven components; then, we evaluate the impact of the implementation of a labour market reform, which substantially changed the regulations of temporary contracts.
Original languageEnglish
PublisherarXiv
DOIs
Publication statusPublished - 2 Apr 2021

Keywords

  • econ.GN
  • q-fin.EC
  • Labour market flows
  • instantaneous transition rates
  • Markov process in continuous time
  • labour market forecasting
  • policy evaluation

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