Using the same subsample of the McCall data set as in Chapter 18, estimate using a two-state model with unemployment and employment as the two states, (i.e., ignoring the distinction between part-time and full-time employment as two alternative destinations).

(a) Fit the single-equation Weibull model and compare the results with those for independent CRM with the Weibull specification.

(b) Evaluate the improvement in goodness of fit resulting from the CRM specification.

(c) Evaluate and compare the fitted values of the hazard out of unemployment, evaluated at sample averages of the explanatory variables, from the single equation and the CRM models.

Data from chapter 18

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9 Cumulative Hazard z Weibull Model Residuals 2 Cumulative Hazard 45 degree line 4 6 Generalized (Cox-Snell) Residual Figure 18.4: Unemployment duration: generalized residuals from the Weibull model. Same data as Figure 18.2.