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Labor Market Integration in Urban Ethiopia, 1994-2004

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  • Arne Bigsten
  • Taye Mengistae
  • Abebe Shimeles

Abstract

An analysis of panel data on individuals in a random selection of urban households in Ethiopia reveals large, sustained, and unexplained earnings gaps between public and private and formal and informal sectors over 1994-2004. At the same time, we find, first, that the rate of mobility increased in the two pairs of sectors. Sample transitions rates grew across survey waves, while state dependence in sector choice decreased. Second, the correlation between sector choice and earnings gaps increased over the same period. In particular, the correlation between comparative earnings and selection into the informal sector was high throughout the survey decade and increased in magnitude over the second half of the period. These results suggest that Ethiopia's urban labor markets might be integrating.

Suggested Citation

  • Arne Bigsten & Taye Mengistae & Abebe Shimeles, 2013. "Labor Market Integration in Urban Ethiopia, 1994-2004," Economic Development and Cultural Change, University of Chicago Press, vol. 61(4), pages 889-931.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/670373
    DOI: 10.1086/670373
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    Cited by:

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    2. Blattman, Christopher J. & Dercon, Stefan, 2016. "Occupational Choice in Early Industrializing Societies: Experimental Evidence on the Income and Health Effects of Industrial and Entrepreneurial Work," IZA Discussion Papers 10255, Institute of Labor Economics (IZA).
    3. Endalew Terefe Alene, 2023. "Examine the association between self-employment and return migrants in Ethiopia: evidence from Gondar city youth returnees," Journal of Innovation and Entrepreneurship, Springer, vol. 12(1), pages 1-22, December.
    4. Mengistu Assefa Wendimu & Peter Gibbon, 2014. "Labour markets for irrigated agriculture in central Ethiopia: Wage premiums and segmentation," IFRO Working Paper 2014/06, University of Copenhagen, Department of Food and Resource Economics.
    5. Blattman, Christopher & Dercon, Stefan, 2016. "Occupational choice in early industrializing societies: Experimental evidence on the income and health effects of industrial an," CEPR Discussion Papers 11556, C.E.P.R. Discussion Papers.

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