Computer codes for "Labor-market Frictions, Incomplete Insurance and Severance Payments"
by Etienne Lal?


Fortran codes (folder "fortran_code")

The folder contains a detailed instruction file.

1. Codes are written in Fortran language, compiled with the Intel(R) Fortran compiler 
and run on a machine with 64 GBytes memory, and running 64-bit Windows 7 64-bit.

2. "main.f90" is the program where the computation starts. It calls subroutines that 
define values of parameters (see 3. below) and compute the steady-state equilibrium (see 
"check_equilibrium.f90" calling (a) "solve_prog_retirees.f90", (b) "wage_function.f90"
and "solve_prog_workers.f90", and (c) "distribution.f90").

3. "initial.f90" and "globals.f90" define values of parameters used in the computation.
Use the .txt files "input/policy.txt" and "input/model_type.txt" to fully specify the model:
"policy.txt" sets the severance pay rate and "model_type.txt" speficies whether the model
includes life-cycle profiles for productivity, job tenure, job separation, pension benefits 
and a relaxed borrowing limit.

4. Computation of a steady-state equilibrium at given values of tightness, pensions and UI
taxes about seven minutes. The computation of a steady-state equilibrium takes a few minutes
more when the severance pay rate is non-zero (extra loop to iterate on the average wage).

5. Random numbers are not used in the computation of the model's equilibrium.


Stata codes (folder "stata_code")

The folder contains 1. a detailed instruction file explaing how the final dataset was
created from CPS files available on the internet, and 2. the dofile used to analyze the data.