A model is developed that allows for a layoff rate and a job arrival rate in the intertemporal choice of consumption and labor market state. The identification of such a model is established without recourse to dynamic programming solutions and the minimum data requirements for estimation are derived. Unobserved heterogeneity is included in the model specification but state dependence is only allowed through the layoff and arrival rates which are restricted to be functions of observable weakly exogenous variables.

Authors

Richard Blundell
Richard Blundell

CPP Co-Director

Richard is Co-Director of the Centre for the Microeconomic Analysis of Public Policy (CPP) and Senior Research Fellow at IFS.

Costas Meghir
Costas Meghir

Research Fellow Yale University

Costas is a Research Fellow of the IFS and a Professor of Economics at Yale University and a Visiting Professor at University College London.

Thierry Magnac
Thierry Magnac

Research Associate Toulouse School of Economics

Thierry is a Research Associate of IFS, a Research Fellow at CEPR, London and a Professor of Economics at the University of Toulouse,

Working Paper details

DOI
10.1920/wp.ifs.1996.9605
Publisher
IFS

Suggested citation

R, Blundell and T, Magnac and C, Meghir. (1996). Savings and labour market transitions. London: IFS. Available at: https://ifs.org.uk/publications/savings-and-labour-market-transitions (accessed: 14 May 2024).

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