We analyze the effect of land reform legislation on labor market dynamics in the Romanian economy. We show that the agricultural sector, a source of precarious employment, has become an absorbing state for certain categories of workers who lost their jobs in the nonagricultural sector. A random utility model is used to represent individuals? sequential labor market decisions. The resulting multivariate probit model is estimated using Markov chain Monte Carlo methods.
labor force participation three-state dynamic model multivariate probit Markov chain Monte Carlo transition economy land reform