We discuss the relevance of the methodology adopted internationally to compare labor market flexibility, which is based on a two-state labor market model and uses stock data to derive transition rates. This model neglects inactivity, and thus it may crucially affect the results. Therefore, we compare these results with transition rates derived by using a three-state labor market model for France, Italy, Spain and the UK. These countries represent, respectively, the continental Europe and the Anglo-Saxon institutional settings. The implied transition rates are much higher even in continental Europe when inactivity is explicitly considered, thus suggesting that conclusions derived using an incomplete representation of the labor market are flawed.

Baussola, M. L., Ferretti, C., Mussida, C., Pitfalls in labour market flows modeling: a Reappraisal, <<Quaderno DISES>>, 2017; 122 (Febbraio): 3-31 [http://hdl.handle.net/10807/100929]

Pitfalls in labour market flows modeling: a Reappraisal

Baussola, Maurizio Luigi
Primo
;
Ferretti, Camilla
Secondo
;
Mussida, Chiara
Ultimo
2017

Abstract

We discuss the relevance of the methodology adopted internationally to compare labor market flexibility, which is based on a two-state labor market model and uses stock data to derive transition rates. This model neglects inactivity, and thus it may crucially affect the results. Therefore, we compare these results with transition rates derived by using a three-state labor market model for France, Italy, Spain and the UK. These countries represent, respectively, the continental Europe and the Anglo-Saxon institutional settings. The implied transition rates are much higher even in continental Europe when inactivity is explicitly considered, thus suggesting that conclusions derived using an incomplete representation of the labor market are flawed.
Inglese
Quaderno DISES
978-88-343-3360-0
Vita e Pensiero
Baussola, M. L., Ferretti, C., Mussida, C., Pitfalls in labour market flows modeling: a Reappraisal, <<Quaderno DISES>>, 2017; 122 (Febbraio): 3-31 [http://hdl.handle.net/10807/100929]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10807/100929
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