Now repeat for different displacement ages and for different lags since displacement. Some claim people work longer because real wages are falling. Some claim that those fully employed work more hours because jobs are more uncertain. I.e., they work while work is available. There is plenty of informal evidence.
Transition matrices have many problems.
The findings are also extremely sensitive to including or excluding a few observations or changing the composition of the panel. They claim it can also account for growth miracles, in particular for Japan. I suspect that the model has a number of counterfactual implications along the transition path. It is often suggested that neoclassical models with high capital shares account for cross-country growth observations. It would be interesting to formally evaluate this claim using an artificial economy approach.