Abstract
This study examines the extent state dependence among unemployed immigrants in a dynamic discrete choice framework. Three alternative methodologies are employed to control for the problem of the initial condition. The empirical findings show that there is a considerable correlation between the unobserved individual heterogeneity and the initial condition and that the degree of state dependence is overstated if we do not address this problem. The results show that an individual who was unemployed at period “t-1” has 6.5 percentage points higher probability of being unemployed again at period t compared to an individual who was employed at period “t-1”.
| Original language | English |
|---|---|
| Pages (from-to) | 93-106 |
| Number of pages | 14 |
| Journal | International Journal of Economics and Financial Issues |
| Volume | 4 |
| Issue number | 1 |
| Publication status | Published - 2014 |
Keywords
- Dynamic random effects models
- Immigrants
- State dependence
- Unemployment
- Unobserved heterogeneity
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
