Template-type: ReDIF-Paper 1.0
Author-Name: Victoria Prowse
Author-Email: victoria.prowse@nuffield.ox.ac.uk
Author-Workplace-Name: Nuffield College, Oxford University
Author-Workplace-Homepage: http://www.nuffield.ox.ac.uk/college/
Title: State Dependence in a Multi-state Model of Employment
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 endogenity 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 the 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.
Classification-JEL: C15, C35, J62.
Keywords: Dynamic labor supply, Heterogeneity, Multinomial choice, State dependence.
Length: 33 pages
Creation-Date: 2005-08-01
Number: 2005-W20
File-URL: http://www.nuffield.ox.ac.uk/economics/papers/2005/W20/prowse_nufwp1.pdf
File-Format: application/pdf
Handle: RePEc:nuf:econwp:0520