a description of the statistical approach The model consists of a set of value functions-bellman equations There is a value for going into education, working in the current job Switching to a new job if an offer is available Not working These value functions define the probabilities of observed eⅴents The probabilities of all transitions we observe and the density for observed wages constitute the likelihood function sKipA description of the statistical approach • The model consists of a set of value functions – Bellman equations. • There is a value for: – going into education, – working in the current job – Switching to a new job if an offer is available – Not working • These value functions define the probabilities of observed events • The probabilities of all transitions we observe and the density for observed wages constitute the likelihood function SKIP