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Gross Worker Flows in the Presence of Informal Labor Markets : The Mexican Experience 1987-2002

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dc.contributor.author Bosch, Mariano
dc.contributor.author Maloney, William
dc.date.accessioned 2012-06-21T21:15:48Z
dc.date.available 2012-06-21T21:15:48Z
dc.date.issued 2006-04
dc.identifier.uri http://hdl.handle.net/10986/8729
dc.description.abstract This paper applies recent advances in the study of labor market dynamics to a representative developing country with a large informal or unregulated sector, Mexico. It studies quarterly gross flows of workers over a 15-year period that includes two recoveries and recessions, including the celebrated 1995 Tequila crisis. It finds, first, that the formal or modern salaried sector shows the same procyclical job finding rate and mildly countercyclical separation behavior identified in the recent U.S. literature, and relative wage rigidity, both consistent with Shimer (2005a) and Hall (2005). The unregulated informal sector, however, shows reasonable acyclicality in the job finding rate coupled with sharp countercyclical movements in the job separation rate, consistent with standard small firm dynamics and Davis and Haltiwanger (1992 and 1999). This interaction of regulatory coverage and firm sizes, and patterns of gross worker flows thus sheds suggestive light on the roots of countercyclical job finding behavior in the U.S. literature. Second, the patterns of worker transitions between formality and informality correspond to the job-to-job dynamics observed in the United States and not to the traditional idea of informality constituting the inferior sector of a segmented market. That said, the countercyclical job finding in the formal sector combined with the acyclical job finding in informality does lead to the latter absorbing relatively more labor during downturns. Third, aggregate employment dynamics vary across the Tequila crisis and the later 2001 slowdown, suggesting that not only the composition of employment, but the nature of the shocks is important to understanding how the labor market adjusts. en
dc.language English
dc.publisher World Bank, Washington, DC
dc.relation.ispartofseries Policy Research Working Paper; No. 3883
dc.rights CC BY 3.0 IGO
dc.rights.uri http://creativecommons.org/licenses/by/3.0/igo/
dc.subject JOB
dc.subject UNEMPLOYMENT
dc.subject WORKERS
dc.subject MORTALITY
dc.subject WORK IN PROGRESS
dc.subject UNEMPLOYED WORKERS
dc.subject FIRINGS
dc.subject LABOR LAWS
dc.subject WORKPLACE
dc.subject SALARIED EMPLOYEES
dc.subject SALARIED WORKERS
dc.subject JOB SEARCH
dc.subject LABOR PRODUCTIVITY
dc.subject FIRM DYNAMICS
dc.subject WORKING
dc.subject LABOR FORCE
dc.subject WORKER
dc.subject FIRM GROWTH
dc.subject SOCIAL SECURITY
dc.subject UNEMPLOYED
dc.subject JOB CREATION
dc.subject SELF EMPLOYED
dc.subject LABOR LEGISLATION
dc.subject SLOWDOWNS
dc.subject LABOR MARKET
dc.subject LITERATURE
dc.subject INFORMAL LABOR MARKETS
dc.subject PAPERS
dc.subject JOB SEPARATION
dc.subject DISGUISED UNEMPLOYMENT
dc.subject SELF EMPLOYMENT
dc.subject MINIMUM WAGES
dc.subject WAGES
dc.subject PROFESSIONALS
dc.subject UNEMPLOYMENT RATES
dc.subject MINIMUM WAGE
dc.subject JOB DESTRUCTION
dc.subject JOB LOSS
dc.subject EMPLOYMENT PROGRAM
dc.subject FINDING JOBS
dc.subject TOTAL EMPLOYMENT
dc.subject UNEMPLOYMENT RATE
dc.subject EMPLOYMENT RELATIONSHIP
dc.subject UNPAID FAMILY WORKERS
dc.subject SALARIED EMPLOYMENT
dc.subject LABOR MARKET DYNAMICS
dc.subject MARKET
dc.subject EMPLOYERS
dc.subject EMPLOYMENT DYNAMICS
dc.subject FINDING
dc.subject UNIONS
dc.subject URBAN EMPLOYMENT
dc.subject WAGE BARGAINING
dc.subject JOBS
dc.subject JOB TURNOVER
dc.subject HEALTH INSURANCE
dc.subject ESTIMATED PARAMETERS
dc.subject REAL WAGE
dc.subject UNIONIZATION
dc.subject LABOR MARKET ADJUSTMENT
dc.subject SERVANTS
dc.subject URBAN EMPLOYMENT SURVEY
dc.subject FIRING
dc.subject EMPLOYMENT STATUS
dc.subject UNEMPLOYMENT FIGURE
dc.subject FIRM SIZE
dc.subject JOB DESTRUCTION RATES
dc.subject LABOR ORGANIZATION
dc.subject BUSINESS CYCLE
dc.subject UNDEREMPLOYMENT
dc.subject EMPLOYMENT SHARE
dc.subject INFORMAL SECTOR
dc.title Gross Worker Flows in the Presence of Informal Labor Markets : The Mexican Experience 1987-2002 en
dc.rights.holder World Bank


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