The Markov (Increment-Decremenet) Model of Labor Force Activity : New Results Beyond Worklife Expectancies

The Bureau of Labor Statistics introduced the increment-decrement model of labor force activity in Bulletin 2135 in 1982. A subsequent BLS publication, Bulletin 2254, in 1986 also used the increment-decrement methodology. Arguably, worklife expectancies have been the most important progeny of this methodology; but the purpose of this paper is to further explore the rich implications of the Markov nature of the increment-decrement model - implications that take us far beyond the concept of worklike expectancy. We show that the increment-decrement model is a valuable construct that enables us to describe many aspects of labor market activity that should be of interest to economists, sociologists, and demographers