Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/236285 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14254
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We propose a general methodology to measure labour market dynamics, inspired by the search and matching framework, based on the estimate of the transition rates between labour market states. We show how to estimate instantaneous transition rates starting from discrete time observations provided in longitudinal datasets, allowing for any number of states. We illustrate the potential of such methodology using Italian labour market data. First, we decompose the unemployment rate fluctuations into inflow and outflow driven components; then, we evaluate the impact of the implementation of a labour market reform, which substantially changed the regulations of temporary contracts.
Subjects: 
Markov process in continuous time
instantaneous transition rates
labour market flows
labour market forecasting
policy evaluation
JEL: 
C18
C53
E32
E24
J6
Document Type: 
Working Paper

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