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An Econometrical Study about fractional Response Variables with an Application to Swedish NEET and Municipal Labour Market Activities

Pello-Esso, Wazah LU (2018) STAH11 20172
Department of Statistics
Abstract
Over the last ten years young people Not in Education, Employment or Training (NEET) in Sweden have increased from three to almost sixteen percent. During the same period, decentralization of active labour market programs from central to local governments have been implemented. Consequently, since 2005 Swedish municipalities have a statutory obligation to offer young people in NEET appropriate support. However, little is known about the effect of municipal labour market programs.

In empirical studies, the most common approach used to explain NEET, a fractional dependent variable observed in the interval [0,1], has been Ordinary Least Square (OLS). However, the bounded nature of the variable raises estimation and inference issues. The... (More)
Over the last ten years young people Not in Education, Employment or Training (NEET) in Sweden have increased from three to almost sixteen percent. During the same period, decentralization of active labour market programs from central to local governments have been implemented. Consequently, since 2005 Swedish municipalities have a statutory obligation to offer young people in NEET appropriate support. However, little is known about the effect of municipal labour market programs.

In empirical studies, the most common approach used to explain NEET, a fractional dependent variable observed in the interval [0,1], has been Ordinary Least Square (OLS). However, the bounded nature of the variable raises estimation and inference issues. The contribution of this study, to the existing literature about NEET is the use of new econometrical methods i.e. generalized linear model and fractional regression model that are, in terms of their underlying assumptions, more appropriate to use estimating fractional dependent variable. The overall results of 3179 observations on 289 Swedish municipalities between 2003 and 2013 indicates that labour market participation, newly announced places to PES and percentage studying at Komvux within a municipal significantly diminishes NEET. Further, municipal labour programs that strengthen human capital and (or) provide on-the-job-training reduce NEET. (Less)
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author
Pello-Esso, Wazah LU
supervisor
organization
course
STAH11 20172
year
type
M2 - Bachelor Degree
subject
keywords
NEET, Swedish NEET, generalized linear model, fractional dependent variable, fractional regression model, municipal labour market Programs, “Informations- och aktivitetsansvaret”
language
English
id
8936150
date added to LUP
2018-04-23 11:45:49
date last changed
2018-04-23 11:45:49
@misc{8936150,
  abstract     = {{Over the last ten years young people Not in Education, Employment or Training (NEET) in Sweden have increased from three to almost sixteen percent. During the same period, decentralization of active labour market programs from central to local governments have been implemented. Consequently, since 2005 Swedish municipalities have a statutory obligation to offer young people in NEET appropriate support. However, little is known about the effect of municipal labour market programs. 

In empirical studies, the most common approach used to explain NEET, a fractional dependent variable observed in the interval [0,1], has been Ordinary Least Square (OLS). However, the bounded nature of the variable raises estimation and inference issues. The contribution of this study, to the existing literature about NEET is the use of new econometrical methods i.e. generalized linear model and fractional regression model that are, in terms of their underlying assumptions, more appropriate to use estimating fractional dependent variable. The overall results of 3179 observations on 289 Swedish municipalities between 2003 and 2013 indicates that labour market participation, newly announced places to PES and percentage studying at Komvux within a municipal significantly diminishes NEET. Further, municipal labour programs that strengthen human capital and (or) provide on-the-job-training reduce NEET.}},
  author       = {{Pello-Esso, Wazah}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{An Econometrical Study about fractional Response Variables with an Application to Swedish NEET and Municipal Labour Market Activities}},
  year         = {{2018}},
}