Can the relatively slow growth of the formal sector in Mexico during the 1990s be attributed to a rigid labor market and to low turnover rates? Is the increasing share of workers in the informal sector and of self-employed workers evidence of market segmentation, and hence a source of inequality and poverty? Or, as suggested by Maloney (1997), could the relatively large and symmetric flows of workers among all sectors (formal, informal, self-employed, unemployed, etc. ) be more consistent with a well-integrated market where workers search across sectors for job opportunities than one where informal workers seek permanent status in the formal sector and stay until they retire? [1] [1] Maloney, (1997, p. 13).
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Paper provided by Inter-American Development Bank, Research Department in its series RES Working Papers with number
3117.
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