Gross Worker Flows in the Presence of Informal Labor Markets : The Mexican Experience 1987-2002
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...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2006/04/6727754/gross-worker-flows-presence-informal-labor-markets-mexican-experience-1987-2002 http://hdl.handle.net/10986/8729 |
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okr-10986-87292021-04-23T14:02:40Z Gross Worker Flows in the Presence of Informal Labor Markets : The Mexican Experience 1987-2002 Bosch, Mariano Maloney, William BUSINESS CYCLE DISGUISED UNEMPLOYMENT EMPLOYERS EMPLOYMENT DYNAMICS EMPLOYMENT PROGRAM EMPLOYMENT RELATIONSHIP EMPLOYMENT SHARE EMPLOYMENT STATUS ESTIMATED PARAMETERS FINDING FINDING JOBS FIRING FIRINGS FIRM DYNAMICS FIRM GROWTH FIRM SIZE HEALTH INSURANCE INFORMAL LABOR MARKETS INFORMAL SECTOR JOB JOB CREATION JOB DESTRUCTION JOB DESTRUCTION RATES JOB LOSS JOB SEARCH JOB SEPARATION JOB TURNOVER JOBS LABOR FORCE LABOR LAWS LABOR LEGISLATION LABOR MARKET LABOR MARKET ADJUSTMENT LABOR MARKET DYNAMICS LABOR ORGANIZATION LABOR PRODUCTIVITY LITERATURE MARKET MINIMUM WAGE MINIMUM WAGES MORTALITY PAPERS PROFESSIONALS REAL WAGE SALARIED EMPLOYEES SALARIED EMPLOYMENT SALARIED WORKERS SELF EMPLOYED SELF EMPLOYMENT SERVANTS SLOWDOWNS SOCIAL SECURITY TOTAL EMPLOYMENT UNDEREMPLOYMENT UNEMPLOYED UNEMPLOYED WORKERS UNEMPLOYMENT UNEMPLOYMENT FIGURE UNEMPLOYMENT RATE UNEMPLOYMENT RATES UNIONIZATION UNIONS UNPAID FAMILY WORKERS URBAN EMPLOYMENT URBAN EMPLOYMENT SURVEY WAGE BARGAINING WAGES WORK IN PROGRESS WORKER WORKERS WORKING WORKPLACE 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. 2012-06-21T21:15:48Z 2012-06-21T21:15:48Z 2006-04 http://documents.worldbank.org/curated/en/2006/04/6727754/gross-worker-flows-presence-informal-labor-markets-mexican-experience-1987-2002 http://hdl.handle.net/10986/8729 English Policy Research Working Paper; No. 3883 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Mexico |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
BUSINESS CYCLE DISGUISED UNEMPLOYMENT EMPLOYERS EMPLOYMENT DYNAMICS EMPLOYMENT PROGRAM EMPLOYMENT RELATIONSHIP EMPLOYMENT SHARE EMPLOYMENT STATUS ESTIMATED PARAMETERS FINDING FINDING JOBS FIRING FIRINGS FIRM DYNAMICS FIRM GROWTH FIRM SIZE HEALTH INSURANCE INFORMAL LABOR MARKETS INFORMAL SECTOR JOB JOB CREATION JOB DESTRUCTION JOB DESTRUCTION RATES JOB LOSS JOB SEARCH JOB SEPARATION JOB TURNOVER JOBS LABOR FORCE LABOR LAWS LABOR LEGISLATION LABOR MARKET LABOR MARKET ADJUSTMENT LABOR MARKET DYNAMICS LABOR ORGANIZATION LABOR PRODUCTIVITY LITERATURE MARKET MINIMUM WAGE MINIMUM WAGES MORTALITY PAPERS PROFESSIONALS REAL WAGE SALARIED EMPLOYEES SALARIED EMPLOYMENT SALARIED WORKERS SELF EMPLOYED SELF EMPLOYMENT SERVANTS SLOWDOWNS SOCIAL SECURITY TOTAL EMPLOYMENT UNDEREMPLOYMENT UNEMPLOYED UNEMPLOYED WORKERS UNEMPLOYMENT UNEMPLOYMENT FIGURE UNEMPLOYMENT RATE UNEMPLOYMENT RATES UNIONIZATION UNIONS UNPAID FAMILY WORKERS URBAN EMPLOYMENT URBAN EMPLOYMENT SURVEY WAGE BARGAINING WAGES WORK IN PROGRESS WORKER WORKERS WORKING WORKPLACE |
| spellingShingle |
BUSINESS CYCLE DISGUISED UNEMPLOYMENT EMPLOYERS EMPLOYMENT DYNAMICS EMPLOYMENT PROGRAM EMPLOYMENT RELATIONSHIP EMPLOYMENT SHARE EMPLOYMENT STATUS ESTIMATED PARAMETERS FINDING FINDING JOBS FIRING FIRINGS FIRM DYNAMICS FIRM GROWTH FIRM SIZE HEALTH INSURANCE INFORMAL LABOR MARKETS INFORMAL SECTOR JOB JOB CREATION JOB DESTRUCTION JOB DESTRUCTION RATES JOB LOSS JOB SEARCH JOB SEPARATION JOB TURNOVER JOBS LABOR FORCE LABOR LAWS LABOR LEGISLATION LABOR MARKET LABOR MARKET ADJUSTMENT LABOR MARKET DYNAMICS LABOR ORGANIZATION LABOR PRODUCTIVITY LITERATURE MARKET MINIMUM WAGE MINIMUM WAGES MORTALITY PAPERS PROFESSIONALS REAL WAGE SALARIED EMPLOYEES SALARIED EMPLOYMENT SALARIED WORKERS SELF EMPLOYED SELF EMPLOYMENT SERVANTS SLOWDOWNS SOCIAL SECURITY TOTAL EMPLOYMENT UNDEREMPLOYMENT UNEMPLOYED UNEMPLOYED WORKERS UNEMPLOYMENT UNEMPLOYMENT FIGURE UNEMPLOYMENT RATE UNEMPLOYMENT RATES UNIONIZATION UNIONS UNPAID FAMILY WORKERS URBAN EMPLOYMENT URBAN EMPLOYMENT SURVEY WAGE BARGAINING WAGES WORK IN PROGRESS WORKER WORKERS WORKING WORKPLACE Bosch, Mariano Maloney, William Gross Worker Flows in the Presence of Informal Labor Markets : The Mexican Experience 1987-2002 |
| geographic_facet |
Latin America & Caribbean Mexico |
| relation |
Policy Research Working Paper; No. 3883 |
| description |
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. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Bosch, Mariano Maloney, William |
| author_facet |
Bosch, Mariano Maloney, William |
| author_sort |
Bosch, Mariano |
| title |
Gross Worker Flows in the Presence of Informal Labor Markets : The Mexican Experience 1987-2002 |
| title_short |
Gross Worker Flows in the Presence of Informal Labor Markets : The Mexican Experience 1987-2002 |
| title_full |
Gross Worker Flows in the Presence of Informal Labor Markets : The Mexican Experience 1987-2002 |
| title_fullStr |
Gross Worker Flows in the Presence of Informal Labor Markets : The Mexican Experience 1987-2002 |
| title_full_unstemmed |
Gross Worker Flows in the Presence of Informal Labor Markets : The Mexican Experience 1987-2002 |
| title_sort |
gross worker flows in the presence of informal labor markets : the mexican experience 1987-2002 |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2006/04/6727754/gross-worker-flows-presence-informal-labor-markets-mexican-experience-1987-2002 http://hdl.handle.net/10986/8729 |
| _version_ |
1764405888404160512 |