An efficient monte carlo study of two-step generalized least squares estimators for random-effects panel data models

Using efficient Monte Carlo methods, the performance of two-step Generalized Least Squares (GLS) estimators for the one-way error components models in small samples is analyzed. In our approach, we focus on the two-step GLS estimators provided by the programs LIMDEP, RATS and TSP, which mainly differ in the solution of negative variance components problem. Our main result is that the use of non negative first-step estimators, as RATS, produces a considerably efficiency loss. We greatly improve the efficiency of simulations using a control variate that can be implemented with no virtually computational cost.

THE EFFECTS OF LABOR MARKET CONDITIONS AND FAMILY BACKGROUNDS ON EDUCATION ATTAINMENT OF SPANISH YOUNGSTERS

The aim of this paper is to study the impact of family background and labor market conditions on educational attainment of Spanish youngsters using a new sample of data drawn for the first seven waves of the European Community Household Panel (ECHP). Our results show that family background variables are strong determinants of the number of young adults that attained post-compulsory education. More specifically, we obtain that children¿s educational achievement is strongly related to parental education. Moreover, the results suggest that unemployment prospects aspect the demand for education through diminishing costs more than increasing returns to education. It could indicate that unemployment rate push people to enroll in tertiary education. El objetivo de este trabajo es analizar el impacto del entorno familiar y las condiciones del mercado laboral en las decisiones de educación de los jóvenes españoles. Para ello, vamos a usar una nueva muestra de datos obtenida de las primeras siete olas del panel de hogares europeo (phogue). Nuestros resultados muestran que las variables familiares tienen un fuerte impacto en el número de jóvenes que alcanzan educación superior. En concreto, obtenemos que la educación de los padres juega un papel muy importante. Además, nuestros resultados sugieren que las tasas de desempleo afectan a la decisión educativa disminuyendo los costes educativos pero no se observa evidencia de que incrementen los rendimientos de la educación. Estos resultados indican que las altas tasas de desempleo fomentan que los jóvenes realicen estudios universitarios.decisión de educación, tasas de desempleo, probit ordenado educational attainment; family backgrounds; unemployment rate

- UN ESTUDIO COMPARATIVO DEL ESTIMADOR DE MÍNIMOS CUADRADOS GENERALIZADOS PARA MODELOS DE PANEL

In this paper we make a comparative study of Generalized Least Squares Estimators used by the programs LIMDEP, RATS and TSP for panel data models. In adittion, we analize Hausman test computed by these programs. Monte Carlo experiments are applied in two di¤erents models: models where it is assumed that individual e¤ects and explanatory variables are independent and models where this assumption is relaxed. Futhermore, we use control variates in order to improve the precision of the experiment reducing the number of replications. En este artículo se realiza un estudio comparativo de los estimadores por Mínimos Cuadrados Generalizados y del contraste de Hausman para modelos de datos de panel aplicados por los programas LIMDEP, RATS y TSP. Con este objetivo se han llevado a cabo experimentos de Montecarlo en modelos en los que no existe correlación entre el componente individual y los regresores y para modelos en los que sí existe correlación. En la realización de los experimentos de Montecarlo se han utilizado variables control, con el objeto de aumentar la eficiencia del experimento con un menor número de iteraciones. Palabras clave: Mínimos Cuadrados Generalizados, datos de panel, experimentos de Montecarlo.Mínimos Cuadrados Generalizados, datos de panel, experimentos de Montecarlo. Generalized Least Squares Estimators, Panel Data, Monte Carlo Experiments.

The causes and consequences of temporary jobs in spain: a theoretical-empirical approach

This paper analyzes the dynamics of temporary jobs in a labor market characterized by worker heterogeneity and employment protection. We argue that segmentation in the labor market arises endogenously from the heterogeneity of workers. In this sense, we show the existence of two opposite dynamics of temporary contracts: for some type of workers temporary jobs act as stepping stones to permanent jobs, whereas other type of workers get stuck in temporary jobs. Using microdata on labor market transitions for Spain, we test and confirm the model's prediction obtaining that for more educated workers temporary contracts serve as stepping stone. By contrast, young workers, women, less educated workers and ''bad history'' workers seem to experiment a penalty and temporary contracts seem to be dead-end jobs. Moreover, we test the ''screening device hypothesis'' by introducing unobserved heterogenity. We obtain that the transition into permanency depends exclusively on the observed characteristics of workers (education, past labor history, etc)

The Welfare Cost of Business Cycles in an Economy with Nonclearing Markets

This paper analyzes thes dynamics of temporary jobs in a labor market characterized by worker's skill heterogeneity and employment protection. We construct a theoretical labor market that incorporates skill differences across workers in order to identify under which conditions temporary contracts are a way for workers to access to permanent contracts (stepping stone effect) or they are dead-end jobs without any good prospect (trap effect). We use longitudinal survey data of individuals to estimate competing risks model with multi-spells for Spain. To deal with selectivity, the model incorporates correlated unobserved determinants in the tranansition rates. Our results show the existence of two opposite dynamics of temporary contracts for skilled and unskilled workers: whereas for skilled workers temporary contracts serve as a stepping stone, unskilled workers seem to experiment a penalty, that is, they get "stuck" in temporary contracts. More importantly, controlling for unobserved heterogeneity is quite important in order to obtain clear estimates.

The determinants of post-compulsory education in Spain

In this article we explain why Spain is at the bottom of the developed countries in secondary education. We have made use of extensive information contained in the ECHP supplemented with labour market data. We find that higher rates of unemployment diminish the probability of investing in post-compulsory education and this effect differs across the population. Our results suggest that a 'poverty effect' makes access more difficult to secondary education in Spain.

Temporary contracts, employment protection and skill: A simple model

We construct a theoretical labor market that incorporates skill differences across workers to identify under which conditions temporary contracts are a way to access to permanency. Firing costs and unemployment benefits increase the threshold productivity above which workers access to permanency.

Un estudio comparativo del estimador de mínimos cuadrados generalizados para modelos de panel

En este artículo se realiza un estudio comparativo de los estimadores por Mínimos Cuadrados Generalizados y del contraste de Hausman para modelos de datos de panel aplicados por los programas LIMDEP, RATS y TSP. Con este objetivo se han llevado a cabo experimentos de Montecarlo en modelos en los que no existe correlación entre el componente individual y los regresores y para modelos en los que sí existe correlación. En la realización de los experimentos de Montecarlo se han utilizado variables control, con el objeto de aumentar la eficiencia del experimento con un menor número de iteraciones. Palabras clave: Mínimos Cuadrados Generalizados, datos de panel, experimentos de Montecarlo

The effect of labour market conditions and family background on educational attainment of Spanish youngsters

Includes bibliographical referencesAvailable from British Library Document Supply Centre- DSC:4582. 84288(2003-1) / BLDSC - British Library Document Supply CentreSIGLEGBUnited Kingdo