February 2002

IZA DP No. 438: Employment Dynamics in the Romanian Labor Market: A Markov Chain Monte Carlo Approach

published in: Journal of Comparative Economics, 2005, 33 (3), 604-639

We use micro data from the Romanian Labor Force Survey to analyze the effect of the restructuring process on the employment dynamics of urban residents in the Romanian labor market. We analyze the way personal characteristics influence individuals’ ability to adjust to labor market transformations. Sequential employment decisions made by individuals are modeled as Markov decision processes. The resulting multivariate probit models are estimated using Markov Chain Monte Carlo techniques.