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Labour Market Entry and Earnings: Evidence from Tanzanian Retrospective Data

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  • Sarah Bridges
  • Louise Fox
  • Alessio Gaggero
  • Trudy Owens
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    Abstract

    We exploit a unique dataset of retrospective information from urban Tanzania to estimate the effect of early labour market experiences on adult labour market outcomes. We consider four labour market entry states – wage employment, selfemployment, employment in the family business, and unemployment - and estimate how final earnings are associated with that entry state. The findings suggest that how individuals enter the labour market does matter for final outcome. We find that for those able to access wage employment, an initial period of unemployment while searching for a wage job may be preferred to an initial period in self-employment or the family business. However, for the two thirds who searched for an average of 5 years and still did not find a wage job, the gamble does not pay off.

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    File URL: http://www.nottingham.ac.uk/credit/documents/papers/crp-13-05.pdf
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    Bibliographic Info

    Paper provided by University of Nottingham, CREDIT in its series Discussion Papers with number 13/05.

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    Handle: RePEc:not:notcre:13/05

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    Postal: School of Economics University of Nottingham University Park Nottingham NG7 2RD
    Phone: (44) 0115 951 5620
    Fax: (0115) 951 4159
    Web page: http://www.nottingham.ac.uk/economics/
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    Related research

    Keywords: Labour market entry; youth unemployment; final earnings; retrospective information;

    References

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    1. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    2. Simon Quinn & Francis Teal, 2008. "Private sector development and income dynamics: A panel study of the Tanzanian labour market," CSAE Working Paper Series 2008-09, Centre for the Study of African Economies, University of Oxford.
    3. Paolo Falco & William F. Maloney & Bob Rijkers & Mauricio Sarrias, 2010. "Heterogeneity in Subjective Wellbeing: An Application to Occupational Allocation in Africa," DOCUMENTOS CEDE 010494, UNIVERSIDAD DE LOS ANDES-CEDE.
    4. Francis Teal & Justin Sandefur & Neil Rankin, 2010. "Learning; Earning in Africa: Where are the Returns to Education High?," Economics Series Working Papers CSAE WPS/2010-02, University of Oxford, Department of Economics.
    5. Paolo Falco & Andrew Kerr & Neil Rankin & Justin Sandefur & Francis Teal, 2010. "The Returns to formality and Informality in Urban Africa," CSAE Working Paper Series 2010-03, Centre for the Study of African Economies, University of Oxford.
    6. Gregg, Paul, 2001. "The Impact of Youth Unemployment on Adult Unemployment in the NCDS," Economic Journal, Royal Economic Society, vol. 111(475), pages F626-53, November.
    7. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
    8. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June.
    9. Rosella Gardecki & David Neumark, 1997. "Order from Chaos? The Effects of Early Labor Market Experiences on Adult Labor Market Outcomes," NBER Working Papers 5899, National Bureau of Economic Research, Inc.
    10. Oded Galor & Nachum Sicherman, 1988. "A Theory of Career Mobility," University of Chicago - George G. Stigler Center for Study of Economy and State 51, Chicago - Center for Study of Economy and State.
    11. 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.
    12. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, May.
    13. Teal, Francis, 2011. "The price of labour and understanding the causes of poverty," Labour Economics, Elsevier, vol. 18(S1), pages S7-S15.
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