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 usi...
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| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| 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 |
| Summary: | 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. |
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