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Mobility in the Urban Labor Market: A Panel Data Analysis for Mexico

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Author Info
Gong, Xiaodong
Van Soest, Arthur
Villagomez, Elizabeth

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Abstract

We analyze mobility in urban Mexico between three labor market states: working in the formal sector, working in the informal sector, and not working. A dynamic multinomial logit panel data model with random effects is used, explaining the labor market state of each individual during each time period. The data are drawn from Mexico's Urban Employment Survey, a quarterly household survey for urban Mexico. While some of the descriptive statistics suggest that informal sector jobs are inferior to formal sector jobs, formal tests cannot reject the null hypothesis of equal transition rates between formal and informal sector jobs for homogeneous groups of workers. Looking at entry and exit into and out of nonemployment, we find that transitions from formal sector jobs to nonemployment were less likely than transitions from informal sector jobs to nonemployment in 1992 but not in 1999, suggesting that employment protection in the formal sector has been reduced.

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Publisher Info
Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 53 (2004)
Issue (Month): 1 (October)
Pages: 1-36
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Handle: RePEc:ucp:ecdecc:y:2004:v:53:i:1:p:1-36

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Pradhan, Menno & van Soest, Arthur, 1995. "Formal and informal sector employment in urban areas of Bolivia," Labour Economics, Elsevier, vol. 2(3), pages 275-297, September. [Downloadable!] (restricted)
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  2. Magnac, Th, 1991. "Segmented or Competitive Labor Markets," Econometrica, Econometric Society, vol. 59(1), pages 165-87, January. [Downloadable!] (restricted)
  3. Menno Pradhan & Arthur Van Soest, 1997. "Household Labor Supply In Urban Areas Of Bolivia," The Review of Economics and Statistics, MIT Press, vol. 79(2), pages 300-310, May. [Downloadable!] (restricted)
  4. Heckman, James J & Sedlacek, Guilherme, 1985. "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-selection in the Labor Market," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1077-1125, December. [Downloadable!] (restricted)
  5. Fields, Gary S., 1975. "Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs," Journal of Development Economics, Elsevier, vol. 2(2), pages 165-187, June. [Downloadable!] (restricted)
  6. Gourieroux, Christian & Monfort, Alain, 1993. "Simulation-based inference : A survey with special reference to panel data models," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 5-33, September. [Downloadable!] (restricted)
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