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Title:Justifying functional forms in models for transitions between discrete states, with particular reference to employment-unemployment dynamics PDF Logo
Authors:Dagsvik, John K.
Issue Date:2006
Series/Report no.:Memorandum, Department of Economics, University of Oslo 2006,06
Abstract:This paper proposes a particular axiomatic approach to motivate the choice of functional forms and distribution of unobservables in continuous time models for discrete panel data analysis. We discuss in particular applications with data on transitions between employment and unemployment. This framework yields a characterization of transition probabilities and duration distributions in terms of structural parameters of the utility function and choice constraints. Moreover, it is discussed how the modeling framework can be extended to allow for involuntary transitions, structural state dependence and random effects.
Subjects:Discrete choice in continuous time
Duration of unemployment/employment
Random utility models
Functional form
Invariance principles
JEL:C23
C25
C41
Document Type:Working Paper
Appears in Collections:Memorandum, Department of Economics, University of Oslo

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