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Job Durations With Worker- and Firm-Specific Effects: MCMC Estimation With Longitudinal Employer--Employee Data

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  • Guillaume Horny
  • Rute Mendes
  • Gerard J. van den Berg

Abstract

We study job durations using a multivariate hazard model allowing for worker-specific and firm-specific unobserved determinants. The latter are captured by unobserved heterogeneity terms or random effects, one at the firm level and another at the worker level. This enables us to decompose the variation in job durations into the relative contribution of the worker and the firm. We also allow the unobserved terms to be correlated in a model that is primarily relevant for markets with small firms. For the empirical analysis, we use a Portuguese longitudinal matched employer--employee dataset. The model is estimated with a Bayesian Markov chain Monte Carlo (MCMC) estimation method. The results imply that unobserved firm characteristics explain almost 40% of the systematic variation in log job durations. In addition, we find a positive correlation between unobserved worker and firm characteristics.

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  • Guillaume Horny & Rute Mendes & Gerard J. van den Berg, 2012. "Job Durations With Worker- and Firm-Specific Effects: MCMC Estimation With Longitudinal Employer--Employee Data," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 30(3), pages 468-480, March.
    • Handle: RePEc:taf:jnlbes:v:30:y:2012:i:3:p:468-480
    DOI: 10.1080/07350015.2012.698142
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    Cited by:

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    2. Mendes, Rute & van den Berg, Gerard J. & Lindeboom, Maarten, 2010. "An empirical assessment of assortative matching in the labor market," Labour Economics, Elsevier, vol. 17(6), pages 919-929, December.
    3. Katharina Dengler & Katrin Hohmeyer & Cordula Zabel, 2021. "Welfare recipients’ transition into employment and employment stability in Germany," LABOUR, CEIS, vol. 35(4), pages 450-484, December.
    4. Castro Silva, Hugo & Lima, Francisco, 2017. "Technology, employment and skills: A look into job duration," Research Policy, Elsevier, vol. 46(8), pages 1519-1530.
    5. Daniel Fernández-Kranz & Marie Paul & Núria Rodríguez-Planas, 2015. "Part-Time Work, Fixed-Term Contracts, and the Returns to Experience," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 77(4), pages 512-541, August.
    6. Ferreira, Priscila, 2009. "The determinants of promotions and firm separations," ISER Working Paper Series 2009-11, Institute for Social and Economic Research.
    7. Giuseppe Tattara & Marco Valentini, 2010. "Turnover and Excess Worker Reallocation. The Veneto Labour Market between 1982 and 1996," LABOUR, CEIS, vol. 24(4), pages 474-500, December.
    8. Paul, Marie & Fernandez-Kranz, Daniel & Rodriguez-Planas, Nuria, 2014. "The Wage Effects of Fixed-term Contract Employment Revisited: an Investigation Based on Social Security Records," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100324, Verein für Socialpolitik / German Economic Association.
    9. Raul Caruso & Ilaria Petrarca & Roberto Ricciuti, 2014. "Spatial Concentration of Military Dictatorships in Sub-Saharan Africa (1977-2007)," CESifo Working Paper Series 4802, CESifo.
    10. Rémi Piatek & Pia Pinger, 2016. "Maintaining (Locus of) Control? Data Combination for the Identification and Inference of Factor Structure Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(4), pages 734-755, June.

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    More about this item

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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