A nonparametric test for path dependence in discrete panel data

► This paper proposes a test for path dependence in discrete panel data. ► Under the null of no path dependence, certain sequences of states have to occur with equal probability. ► The test proposed rejects under violation of these equality restrictions. ► This test is applied to European Community Household Panel data on employment histories. ► The data allow to reject the null of no path dependence in all subsamples considered.