Martinez-Granado, Maria Teresa; (1998) Analysing labour market mobility: some empirical applications. Doctoral thesis (Ph.D), UCL (University College London).

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Abstract

This thesis analyses different labour market aspects using microeconometric techniques, relating individual labour supply and mobility (jobs or occupation). Chapter 2 provides empirical evidence, using US data, on testing the assumption that considers individuals freely decide the number of hours they work at a given wage. Change in hours equations are estimated for individuals that change job and for those that stay in the same one using a GMM estimator. By comparing the variance (after controlling by observable heterogeneity) of the change in hours for individuals that move from their job and for those who stay in two consecutive periods, we can conclude that the dispersion in hours for those who move is significantly higher than for those who stay. The main conclusion is that some other factors besides personal characteristics and wages are behind movements between jobs and that traditional life-cycle labour supply models are misspecified. Chapter 3 investigates the characteristics and economic factors that determine self-employment decisions in UK. A multiple state transition model with unobservable heterogeneity is estimated, describing transitions in and out of three possible labour market states: self-employment, paid employment and unemployment. Results are consistent with the hypothesis of a deterioration of the labour market conditions generating an increase in the self-employment rates in adverse economic conditions. However, unemployment duration generates a loss on human capital that reduce the probabilities of switching to self-employment as well as to employment. It appears also that family background and education play an important role in determining the transition probabilities. Medium level educated individuals are the most likely to become self-employed. Using the same of techniques, Chapter 4 analyses labour market transitions jointly for married couples. This chapter investigates the effect of husbands' unemployment spells on wives' participation decisions. The aim is to clarify whether an added worker effect can be found in the UK labour market, that is, whether wives' labour force participation increases when their husbands become unemployed. A small but significant added worker effect is found for a subgroup of households. Women highly attached to the labour market (young, educated, participating before marriage and without children) married to men low or medium level educated are likely to enter the labour force when their husbands become unemployed. The data support the existence of complementarities between leisure of husband and wife.

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