No Education, No Good Jobs? Evidence on the Relationship between Education and Labor Market Segmentation

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The views and interpretations in this document are those of the authors and should not be attributed to the Inter-American Development Bank, or to any individual acting on its behalf. This paper may be freely reproduced provided credit is given to the Research Department, InterAmerican Development Bank. Terms of use: Documents inThe Research Department (RES) produces a quarterly newsletter, IDEA (Ideas for Development in the Americas), as well as working papers and books on diverse economic issues. To obtain a complete list of RES publications, and read or download them please visit our web site at: http://www.iadb.org/res. 3 Abstract 1This paper assesses labor market segmentation across formal and informal salaried jobs and self-employment in three Latin American and three transition countries. It looks separately at the markets for skilled and unskilled labor, inquiring if segmentation is an exclusive feature of the latter. Longitudinal data are used to assess wage differentials and mobility patterns across jobs. To study mobility, the paper compares observed transitions with a new benchmark measure of mobility under the assumption of no segmentation. It finds evidence of a formal wage premium relative to informal salaried jobs in the three Latin American countries, but not in transition economies. It also finds evidence of extensive mobility across these two types of jobs in all countries, particularly from informal salaried to formal jobs. These patterns are suggestive of a preference for formal over informal salaried jobs in all countries. In contrast, there is little mobility between self-employment and formal salaried jobs, suggesting the existence of barriers to this type of mobility or a strong assortative matching according to workers' individual preferences. Lastly, for both wage differentials and mobility, there is no statistical difference across skill levels, indicating that the markets for skilled and unskilled labor are similarly affected by segmentation.JEL Classification: J210, J240, J310, J630.

Does Human Capital Protect Workers against Exogenous Shocks? Evidence from Panel Data on South Africa during the 2008‐2009 Crisis

“…On the other hand, some countervailing factors may reduce the magnitude of our results. First, non‐graduates may find low‐cost entry in the informal sector (Bernabè and Stampini, ; Pages and Stampini, ), while graduates may avoid this option because it is associated with rapid deskilling. This does not seem to be the case in South Africa during the financial crisis, as a decrease in the share of non‐graduates in informal employment is observed.…”

Informal employment relationships and the labor market: Is there segmentation in Ukraine?

“…Fixed effects estimates of wage differentials based on longitudinal data control for unobserved heterogeneity as long as the unobserved characteristics are time-invariant and equally remunerated across jobs. Even though the use of longitudinal data has its own problems when assessing wage gaps (Solon 1988), we report on two studies that employ panel data: Pagés and Stampini (2009) and Lehmann and Pignatti (2007), since they provide relatively reliable estimates of formal-informal wage gaps.…”

“…To account for this artifact researchers produce transition matrices that are adjusted for the relative size of a state and for its capacity to generate vacancies. The studies by Lehmann and Pignatti (2007) on Ukraine, by Pagés and Stampini (2009) on 3 Latin American and 3 post-transition countries 6 , by Bernabè and Stampini (2009)…”

Labor market segmentation and occupational mobility in Algeria: Repeated cross‐sectional and longitudinal analyses (2007 to 2012)

“…Pages and Stampini () use panel data from a sample of six countries and explore labor market segmentation across formal and informal sectors and self‐employment, investigating mobility patterns and wage differentials across the segments. Outcomes suggest that there is a wage premium in the formal sector compared with the informal sector in the three Latin American countries while there is no wage differential in the three transition countries.…”

“…This is the very first longitudinal survey ever made in Algeria. It is worth mentioning that employment surveys in Ukraine (Nezhyvenko & Adair, ; Pagès & Stampini, ) and Russia (Najman & Pailhé, ) use rotative samples, instead of cohorts addressing the same individuals.…”