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.

Informal Employment in Transition Countries: Empirical Evidence and Research Challenges

“…Based on their evidence Pagés and Stampini (2009) come to somewhat different conclusions as far the Ukrainian labor market is concerned. They estimate P-matrices and counterfactual matrices (Zmatrices) that assume no labor market segmentation.…”

Does Expanding Health Insurance Beyond Formal-Sector Workers Encourage Informality?: Measuring the Impact of Mexico's Seguro Popular

“…A number of studies have documented the high dynamism of the Mexican labor market, in terms of experiencing large flows in and out of the formal sector and also in and out of the labor market (Maloney, 1999;Pagés and Stampini, 2009). …”

Labour Mobility During Transition: Evidence from Georgia

“…Furthermore, Pages and Stampini (2007) exclude agricultural self-employment, and do not analyse rural and urban labour markets separately.…”

“…The literature estimating and analyzing transition probabilities across labour market states in post-communist economies is considerable (see for example Bukowskiy and Lewandowski, 2005, Lauerová and Terrell, 2007, Lehmann and Wadsworth, 2000, Orazem et al, 2005, Pages and Stampini, 2007. However our approach is novel in that: (1) it analyses mobility not only between employment and non-employment, but also across several employment statuses (namely formal, informal, self-employment and farming); and (2) it uses a new and clean index of transition tendency, which accounts for the number of jobs created by each status.…”