Transitions in labour market status in EU labour markets

IZA Journal of European Labor Studies

Table 3 Successful and unsuccessful labour market outcomes

	Central Eastern	Nordics	Continental	Mediterranean
	Successful labour market outcome
1998-2003	59.489	66.142	66.291	59.439
2004-08	59.997	71.673	61.696	48.285
	Unsuccessful labour market outcome
1998-2003	33.255	19.710	16.627	12.334
2004-08	31.003	15.878	35.231	12.121

Note: Results are based on a 5-dimensional transition probability matrix where statuses are defined as E = employed; U = unemployed; NAN = inactive (excluding education and retirement); RE = in retirement; IE = in education. Compared to the results where a 3-dimensional transition matrix is used (with E = employed; U = unemployed; NA = inactive), the results here holds in the light of NA = NAN + IE + RE. In other words, in computing successful and unsuccessful labour market outcomes we control for education and retirement flows when defining the status of inactivity. Following Theeuwes et al. (1990) a successful labour market entry is computed as the percentage of people successfully entering the labour market (p_nan,e) as a percentage of the total number of people entering the labour market, i.e. SL^jt = p_nan,e^jt/( p_nan,e^jt + p_nan,u^jt).
Analogously, an unsuccessful labour market outcome is the percentage of people withdrawing from the labour market (but not moving to either retirement or education), as a percentage of people leaving unemployment, i.e. FL^jt = p_u,nan^jt/( p_u,nan^jt + p_u,e^jt).
Sources: LFS microdata, authors’ computations.