EconPapers    
Economics at your fingertips  
 

Estimating Labor Force Joiners and Leavers Using a Heterogeneity Augmented Two-Tier Stochastic Frontier

Tirthatanmoy Das () and Solomon Polachek
Additional contact information
Tirthatanmoy Das: Indian Institute of Management

No 10534, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We derive a non-standard unit root serial correlation formulation for intertemporal adjustments in the labor force participation rate. This leads to a tractable three-error component model, which in contrast to other models embeds heterogeneity into the error structure. Unlike in the typical iid three-error component two-tier stochastic frontier model, our equation's error components are independent but not identically distributed. This leads to a complex nonlinear likelihood function requiring identification through a two-step estimation procedure, which we estimate using Current Population Survey (CPS) data. By transforming the basic equation linking labor force participation to the working age population, this paper devises a new method which can be used to identify labor market joiners and leavers. The method's advantage is its parsimonious data requirements, especially alleviating the need for survey based longitudinal data.

Keywords: labor force dynamics; two-tier stochastic frontier; identification (search for similar items in EconPapers)
JEL-codes: C23 C51 J21 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2017-01
New Economics Papers: this item is included in nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Published in: Journal of Econometrics, 2017, 199, 156-172.

Downloads: (external link)
http://ftp.iza.org/dp10534.pdf (application/pdf)

Related works:
Journal Article: Estimating labor force joiners and leavers using a heterogeneity augmented two-tier stochastic frontier (2017) Downloads
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:iza:izadps:dp10534

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().

 
Page updated 2020-02-23
Handle: RePEc:iza:izadps:dp10534