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Is Informal Job Experience of Youth Undermining their Labor-Market Prospects in Transition Economies?

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  • Marjan Petreski

    (University American College Skopje)

Abstract

The objective of the paper is to investigate if previous informal employment experience of youth affects later labor-market outcomes in transition economies. We consider the effects on employment, decent job and wages. Some theories suggest that previous informal job experience may extend informality later and negatively impact decent employment and wages, while others argue that informal jobs may provide training, networks and working attitudes to young workers hence improving their formal employment and wage potential. We rely on the newly-produced School to Work Transition Surveys for seven transition economies of Southeast Europe and the Commonwealth of Independent States. Our results robustly suggest that early informality of youth is negative for the later labor-market outcomes. However, for the wage, there is limited evidence that the negative effect potentially turns positive for long informal job experiences. The negative effect of informal job on later outcomes is stronger for females, while any differences between the two regions of transition economies are neither systematic nor robust.

Suggested Citation

  • Marjan Petreski, 2018. "Is Informal Job Experience of Youth Undermining their Labor-Market Prospects in Transition Economies?," Open Economies Review, Springer, vol. 29(4), pages 751-768, September.
    • Handle: RePEc:kap:openec:v:29:y:2018:i:4:d:10.1007_s11079-018-9489-9
    DOI: 10.1007/s11079-018-9489-9
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    Cited by:

    1. Maciej Berk{e}sewicz & Dagmara Nikulin, 2019. "Estimation of the size of informal employment based on administrative records with non-ignorable selection mechanism," Papers 1906.10957, arXiv.org.
    2. Maciej Berȩsewicz & Dagmara Nikulin, 2021. "Estimation of the size of informal employment based on administrative records with non‐ignorable selection mechanism," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 70(3), pages 667-690, June.
    3. Nauro Campos & Karim Aynaoui & Davide Furceri & Prakash Loungani, 2018. "Slow Recovery to Nowhere? Labor Market Issues in Advanced Economies: Introduction," Open Economies Review, Springer, vol. 29(4), pages 695-701, September.

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    More about this item

    Keywords

    Informal job; Employment; Decent employment; Wage; Transition economies;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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