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Labor Market Dynamics and Development

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  • Kevin Donovan
  • Will Jianyu Lu
  • Todd Schoellman

Abstract

We provide new evidence on how labor market dynamics vary with development. We build a new data set consisting of harmonized microdata from rotating panel labor force surveys covering 80 million people from 49 countries. Labor market flows, such as the job-finding or employment exit rate, are higher in developing economies. These higher flows largely reflect a slippery job ladder: workers transition frequently to and from marginal employment without climbing to or persisting in better-paying jobs. Subsistence self-employment and different patterns of selection for wage workers each play a role in our findings and are useful avenues for future theories of labor market frictions.

Suggested Citation

  • Kevin Donovan & Will Jianyu Lu & Todd Schoellman, 2023. "Labor Market Dynamics and Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(4), pages 2287-2325.
    • Handle: RePEc:oup:qjecon:v:138:y:2023:i:4:p:2287-2325.
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    File URL: http://hdl.handle.net/10.1093/qje/qjad019
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    More about this item

    JEL classification:

    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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