Data Analysis and Applications 2

9 Measuring Labor Market Transition Probabilities in Europe with Evidence from the EU-SILC

In this chapter¹, the estimation of youth transition probabilities from school to employment, unemployment and inactivity is provided for all European countries using raw data from the European Union’s Survey on Living and Income Conditions (EU-SILC). More precisely, the input probabilities are measured using the EU-SILC data from 2006 to 2013. Replacing the European Panel Survey since 2003, EU-SILC provides timely and comparable cross-sectional, multidimensional data on income, poverty, social exclusion and living conditions anchored in the European Statistical System. Methodologically, the theory of non-homogenous Markov systems (NHMS) will be used to measure the transition and input probabilities. In the proposed model, the population is stratified into distinct categories according to a certain characteristic, which in this case are the labor market statuses. The study will deliver whether the crisis has created convergence or divergence in youth transitions to employment among European countries and study the evolution of labor market probabilities before and during the crisis for European countries.

9.1. Introduction

Transitions of young individuals among different labor market states and youth labor market entry and integration are crucial to labor market and educational policies. Numerous studies can be found in the literature that intend to cover this central subject. More precisely, ...