Most previous work on occupational choice does not satisfactorily treat the potentially important effects of future demand conditions. In contrast, this paper develops and estimates a rational expectations model in which agents look beyond expected starting salaries and take explicit account of future demand conditions. The empirical results demonstrate that future demand conditions are important determinants of the decision to acquire secondary school certification but are not important for the decision to acquire elementary school certification. The paper concludes with a comparison of the dynamic properties of the rational expectations model and a cobweb specification.

This article specifies and estimates an empirical model of male labor supply based on an implicit market model of wage-hours determination. We discuss how moving from a standard labor supply model to an implicit market model affects model specification and choice of estimation technique. We find that average hourly earnings are not independent of hours worked and that OLS estimates of the wage-hours relationship are biased. We also show that a labor supply model that assumes wages to be independent of hours worked produces a positively biased estimate of the effect of the wage on labor supply.

Workers choose a job and receive in return a bundle consisting of income and a probability of job injury. The authors view this income- job-risk bundle chosen by the worker as being exchanged in an implici t market. By jointly estimating the market income-job-risk locus and the optimum conditions for utility maximization, they are able to identif y the market locus and parameters of the workers' utility function. In contrast to previous work, the authors are able to derive valuations of discrete changes in job risk for each individual in the sample. They present evidence that an increase in nonlabor income leads workers to select safer jobs. Copyright 1988 by MIT Press.

A wage offer can be either acceptable or unacceptable to a worker, but in cross-sectional and panel data only acceptable wage offers are observed. An OLS wage equation will not reveal how job tenure affects wage offers but rather will reveal how tenure affects acceptable wage offers. By jointly modeling the firm's determination of the wage offer and the worker's decision to accept or reject the offer, we are able to estimate the effect of job tenure on wage offers consistently. In contrast to the usual OLS results, we find that job tenure has no statistically significant effect on wage offers.

Methods for exact Bayesian inference under a uniform diffuse prior are set forth for the continuous time homogeneous Markov chain model. It is shown how the exact posterior distribution of any function of interest may be computed using Monte Carlo integration. The solution handles the problems of embeddability in a very natural way, and provides (to our knowledge) the only solution that systematically takes this problem into account. The methods are illustrated using several sets of data.

[The axiomatic derivation of mobility indices for first-order Markov chain models in discrete time is extended to continuous-time models. Many of the logical inconsistencies among axioms noted in the literature for the discrete time models do not arise for continuous time models. It is shown how mobility indices in continuous time Markov chains may be estimated from observations at two points in time. Specific attention is given to the case in which the states are fractiles, and an empirical example is presented.]