Non-stationary Job Search When Jobs Do Not Last Forever: A Structural Estimation to Evaluate Alternative Unemployment Insurance Systems

This paper considers a job search model where the environment is not constant throughout the unemployment spell and where jobs do not last forever. In this situation, reservation wages can be lower than they would be in a model without consideration of such separations, but also they can initially be higher precisely because of this non-stationarity of the model. Moreover, the time-dependence of reservation wages is stronger than it is when separations are not controlled for. The model is estimated structurally by using Spanish data for the period 1985-1996. The main finding is that, although at the beginning the decrease in reservation wages is the main determinant of the exit from unemployment, as time progresses the job offer arrival rate comes to be the only significant factor, given that acceptance probabilities become equal to one. The estimated parameters are used to evaluate the effect of different Unemployment Insurance designs on unemployment duration. Accordingly, one can draw the conclusion that a sufficiently decreasing pattern in unemployment benefits makes this duration to be 8.4% lower.Job Search, Nonstationarity, Unemployment, Separation probability, Structural estimation, Unemployment Insurance.

Retirement incentives, individual heterogeneity and labour transitions of employed and unemployed workers

Un informe que analiza la incidencia de las políticas públicas relevantes en edades próximas a la jubilación sobre las decisiones laborales de de trabajadores empleados y desempleados.Retirement, unemployment, incentives, Pension system, Unobserved heterogeneity, Spain

Unobserved Heterogeneity in Multi-Spell Discrete Time Duration Models

This paper considers the estimation of discrete time duration models. We highlight the enhance identification opportunities embedded in multiple spell data to separately identify the effect of duration dependence and individual time invariant unobserved heterogeneity. We consider two types of models: (i) random effects models specifying a mass point distribution for the unobserved heterogeneity; and (ii) fixed effects models in which the distribution of the effects is left unrestricted. The availability of multiple spell data allows us to consider this type of models, in the spirit of fixed effects discrete choice panel data models. We study the finite sample properties of different estimators for previous models by means of Monte Carlo simulations. Finally, as an empirical illustration, we estimate unemployment duration models using Spanish administrative data with information on the entire labor history of the individuals.Duration models; Discrete choice; Multiple spells; Unobserved heterogeneity; Unemployment.

Unobserved heterogeneity in multi-spell discrete time duration model

This paper considers the estimation of discrete time duration models. We highlight the enhance identification opportunities embedded in multiple spell data to separately identify the effect of duration dependence and individual time invariant unobserved heterogeneity.Duration models, Discrete choice, Multiple spells, Unobserved heterogeneity, Unemployment.

Unemployment Duration among Immigrants and Natives: Unobserved Heterogeneity in a Multi-Spell Duration Model

This paper studies whether the unemployment dynamics of immigrants differ from those of natives, paying special attention to the impact of accounting for unobserved heterogeneity among individuals. Using a large administrative data set for Spain, we estimate multiple-spell discrete duration models which disentangle unobserved heterogeneity from duration dependence. Specifically, we estimate random effects models assuming that the distribution of the effects is discrete with finite support, and fixed effects models in which the distribution of the unobserved effects is left unrestricted. Our results show the importance of accounting for unobserved heterogeneity and that mistaken policy implications can be derived due to improper treatment of unmeasured variables. We find that lack of control for unobserved heterogeneity leads to the conclusion that immigrant males have a higher probability of leaving unemployment than natives and that the negative effect of unemployment benefits for immigrants lasts longer than for natives. Nonetheless, the estimates which do control for unobserved heterogeneity show the opposite results.Duration models; Discrete choice; Multiple spells; Unobserved heterogeneity; Unemployment; Immigration.

Wage changes through job mobility in Europe: A multinomial endogenous switching approach

This paper presents evidence on the relationship between job mobility and wage mobility for some European countries using the European Community Household Panel (1994- 2001). While much of the earlier research uses least-squares regression to predict wages for individuals with different work experience, we find that it is important to take account of possible non-random selection between job movers and job stayers and between voluntary and involuntary movers. In this paper we focus on the effects of a spell of unemployment on subsequent wages by estimating a multinomial endogenous switching model composed of two selection equations and three wage equations. Our results indicate that job mobility through unemployment has negative returns in all the analysed economies. Relative to stayers, these losses range from 5% in Portugal to 22% in Germany.wage mobility, job mobility, unemployment, endogenous switching,multinomial probit, wage penalties

A Structural Estimation to Evaluate the Wage Penalty After Unemployment in Europe.

We develop a partial equilibrium job search model to analyse wage mobility and its relation to job mobility. The basic job search model is generalized by introducing wage renegotiation at the firm level and on-the-job search. Besides we model the value of leisure as a function of the previous wage. We present a semi-structural estimation using data on employment and wages for men 20 to 60 years old from the European Community Household Panel (Spain, Germany, France and Portugal). The estimated parameters from the model are then used to identify the sources of the wage loss associated with unemployment. German and Spanish workers tend to suffer larger wage penalties than their French and Portuguese counterparts. Wage losses in Germany are mainly related to better wage opportunities when employed. In Spain wage losses tend to remain longer since on the job wage growth is lower. We also evaluate the effect of the Unemployment Benefit system on wage changes after unemployment and find that a sole level for unemployment benefits (dependent on the national average wage level) reduces wage penalties for all workers with the exception of the highly educated.Semi-structural estimation, wage mobility, job mobility, search models

The use of permanent and temporary jobs across Spanish regions: Do unit labour cost differentials offer an explanation?

We study the use of permanent and temporary contracts across Spanish regions during the period 1995-2001. First we show that there are significant differences among the regional rates of permanent employment and that these differences tend to persist over time. To understand the underlying factors behind these observed differences we estimate a binary choice model for the individual probability of having a permanent contract, taking advantage of the panel data dimension of the Spanish Labour Force Survey. Our main results are that unit labour cost differentials, and thus labour productivity and total labour cost differentials, partially explain the divergence of regional permanent employment rates. Moreover, compared to the influence of regional fixed effects and other possible explanations such as sector specialisation or the presence of small firms in the region, unit labour costs explain more than two thirds of the observed variance in the permanent employment rate across Spanish regions, once all the relevant heterogeneity is taken into account .Temporary Employment, Unit Labour Costs, Random Effects, Spanish Regions.

Mathematical open problems in Projected Entangled Pair States

Projected Entangled Pair States (PEPS) are used in practice as an efficient parametrization of the set of ground states of quantum many body systems. The aim of this paper is to present, for a broad mathematical audience, some mathematical questions about PEPS.Comment: Notes associated to the Santal\'o Lecture 2017, Universidad Complutense de Madrid (UCM), minor typos correcte

El problema de desempleo en la economía andaluza (1990-2001): análisis de la transición desde la educación al mercado laboral

In this paper we examine some differential facts of the Andalusian labour market in comparison with the Spanish one, concentrating on the higher incidence of youth unemployment in Andalusia. Our results show that the probability that the Andalusian young workers quickly find their first significant employment is much lower than that of the rest of Spaniards. We find clear evidence that the main effects upon this probability are that of the business cycle, of individual education and also of parents educational attainment. Furthermore, the effect of this variable is much larger in Andalusia than in the rest of Spain, what we interpret as evidence about channels of information in Andalusia being more imperfect. Finally, we find some evidence that an university degree contribute less to have a lower expected unemployment duration in Andalusia than in the rest of Spain.duration analysis, unemployment duration, marital sorting