Comparative Analysis of Labor Market Dynamics Using Markov Processes : An Application to Informality

This paper discusses a set of statistics for examining and comparing labor market dynamics based on the estimation of continuous time Markov transition processes. It then uses these to establish stylized facts about dynamic patterns of movement using panel data from Argentina, Brazil and Mexico. The estimates suggest broad commonalities among the three countries, and establish numerous common patterns of worker mobility among sectors of work and inactivity. As such, we offer some of the first comparative work on labor dynamics. The paper then particularly focuses on the role of the informal sector, both for its intrinsic interest, and as a case study illustrating the strengths and limits of the tools. The results suggest that a substantial part of the informal sector, particularly the self-employed, corresponds to voluntary entry although informal salaried work may correspond more closely to the standard queuing view, especially for younger workers.

Bibliographic Details

Main Authors:	Bosch, Mariano, Maloney, William
Format:	Policy Research Working Paper biblioteca
Language:	English
Published:	World Bank, Washington, DC 2007-12
Subjects:	AGE GROUP, AGE GROUPS, BUSINESS CYCLE, CALCULATION, DEVELOPMENT ECONOMICS, DISGUISED UNEMPLOYMENT, DIVISION OF LABOUR, ECONOMIC ACTIVITY, EMPLOYMENT PATTERNS, EMPLOYMENT SPELL, EMPLOYMENT STATUS, ENTREPRENEURIAL ABILITY, ENTRY POINT, EQUILIBRIUM UNEMPLOYMENT, ESTIMATED PARAMETERS, FAMILY RESPONSIBILITIES, FIRM DYNAMICS, FORMAL SECTOR WORKERS, HIGH UNEMPLOYMENT, HOUSEHOLD SURVEY, INFORMAL EMPLOYMENT, INFORMAL LABOR MARKET, INFORMAL SECTOR, INTERNATIONAL PRICES, JOB CREATION, JOB DESTRUCTION, JOB SEPARATION, JOB TURNOVER, JOBS, LABOR ECONOMICS, LABOR FORCE, LABOR FORCE PARTICIPATION, LABOR LEGISLATION, LABOR MARKET, LABOR MARKET FLEXIBILITY, LABOR MARKET TRANSITIONS, LABOR MARKETS, LABOR MOBILITY, LABOR TURNOVER, LABOUR, LABOUR MARKET, LATIN AMERICAN, LEVEL OF EDUCATION, MALE COUNTERPARTS, MARKET WAGE, MEDICAL BENEFITS, MINIMUM WAGES, NEW JOB, NEW JOBS, OLDER WORKERS, POLITICAL ECONOMY, PRIME AGE, PROBABILITIES, PROBABILITY, QUESTIONNAIRE, RECESSION, RESPONSIBILITIES, RISK AVERSION, SAFETY, SAFETY NET, SALARIED EMPLOYMENT, SALARIED WORKERS, SELF EMPLOYED, SELF EMPLOYMENT, SELF- EMPLOYMENT, SELF-EMPLOYMENT, SINGLE FEMALES, SINGLE WOMEN, SOCIAL SECURITY, STOCKS, TEMPORARY WORK, TOTAL EMPLOYMENT, TOTAL LABOR FORCE, TRADE LIBERALIZATION, UNEMPLOYED, UNEMPLOYED WORKERS, UNEMPLOYMENT, UNEMPLOYMENT DURATIONS, UNEMPLOYMENT FIGURE, UNEMPLOYMENT RATE, UNEMPLOYMENT SPELLS, URBAN EMPLOYMENT, URBAN EMPLOYMENT SURVEY, WAGE DETERMINATION, WORK FORCE, WORK IN PROGRESS, WORKER, WORKING, WORTH, YOUNG PEOPLE, YOUNG WORKERS, YOUNGER WORKERS,
Online Access:	http://documents.worldbank.org/curated/en/2007/12/8835902/comparative-analysis-labor-market-dynamics-using-markov-processes-application-informality http://hdl.handle.net/10986/7623
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