A finite mixture latent trajectory model for hirings and separations in the labor market

Silvia Bacci (), Francesco Bartolucci, Claudia Pigini and Marcello Signorelli

MPRA Paper from University Library of Munich, Germany

Abstract: We propose a finite mixture latent trajectory model to study the behavior of firms in terms of open-ended employment contracts that are activated and terminated during a certain period. The model is based on the assumption that the population of firms is composed by unobservable clusters (or latent classes) with a homogeneous time trend in the number of hirings and separations. Our proposal also accounts for the presence of informative drop-out due to the exit of a firm from the market. Parameter estimation is based on the maximum likelihood method, which is efficiently performed through an EM algorithm. The model is applied to data coming from the Compulsory Communication dataset of the local labor office of the province of Perugia (Italy) for the period 2009-2012. The application reveals the presence of six latent classes of firms.

Keywords: Finite mixture models; Latent trajectory model; Compulsory communications; hirings and separations (search for similar items in EconPapers)
JEL-codes: C33 C49 J63 (search for similar items in EconPapers)
Date: 2014-11
New Economics Papers: this item is included in nep-ecm
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