Improving Estimation of Labor Market Disequilibrium through Inclusion of Shortage Indicators

Matthew Baird (), Lindsay Daugherty () and Krishna Kumar ()
Additional contact information
Matthew Baird: RAND Corporation
Lindsay Daugherty: RAND Corporation
Krishna Kumar: RAND Corporation

No 1701, CINCH Working Paper Series from Universitaet Duisburg-Essen, Competent in Competition and Health

Abstract: While economic studies assume that labor markets are in equilibrium, there may be specialized labor markets likely in disequilibrium. We develop a new methodology to improve the estimation of a reduced form disequilibrium model from the existing models by incorporating survey-based shortage indicators into the model and estimation. Our shortage indicator informed disequilibrium model includes as a special case the foundational model of Maddala and Nelson (1974), off of which we build. We demonstrate the gains in information provided by the methodology. We show how the model can be implemented by applying it to the market for anesthesiologists in the United States using two waves of surveys of anesthesiologists. In this application, we find that our new shortage indicator informed disequilibrium model fits the data better than the Maddala and Nelson model, as well as performing better with regards to out-of-sample predictive power.

Keywords: Disequilibrium; labor; maximum likelihood; shortage; health provide (search for similar items in EconPapers)
Pages: 22 pages
Date: 2017-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://cinch.uni-due.de/fileadmin/content/researc ... NCH-Series-Baird.pdf First version, 2017 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:duh:wpaper:1701

Access Statistics for this paper

More papers in CINCH Working Paper Series from Universitaet Duisburg-Essen, Competent in Competition and Health Contact information at EDIRC.
Bibliographic data for series maintained by Benjamin Karas ( this e-mail address is bad, please contact ).