Continuous-time Markov chain in labor market theory: The case of United Kingdom
Abstract
In this paper, the claim that the sojourn times in the UK labor market follow a continuous-time Markov model is investigated. It means that they are independent random variables and mainly they control how rapidly transits take place. In this case sojourn times in a state before they transit another state are exponentially distributed with an appropriate parameter λ_i.
The labor market model presented in this paper is based on Markov process techniques and have been developed in Wolfram Mathematica 9. The model allows us to calculate the long-run proportion of workers transitions, first-passage time and the transition state probabilities. These parameters are then used to detect labour market failures and accordingly propose policies and procedures that Government can use to build a more efficient labour market and increase employability.
The labor market model presented in this paper is based on Markov process techniques and have been developed in Wolfram Mathematica 9. The model allows us to calculate the long-run proportion of workers transitions, first-passage time and the transition state probabilities. These parameters are then used to detect labour market failures and accordingly propose policies and procedures that Government can use to build a more efficient labour market and increase employability.
Keywords
Continuous-time Markov chain; UK labour market; transient analysis
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PDFDOI: http://dx.doi.org/10.21533/scjournal.v6i1.129
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Copyright (c) 2017 Narela Spaseski
ISSN 2233 -1859
Digital Object Identifier DOI: 10.21533/scjournal
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