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Transitions between informal and formal employment: results from a worker survey in Bangladesh

Author

Listed:
  • Italo A. Gutierrez

    (RAND Corporation)

  • Krishna B. Kumar

    (RAND Corporation)

  • Minhaj Mahmud

    (Bangladesh Institute of Development Studies)

  • Farzana Munshi

    (BRAC University)

  • Shanthi Nataraj

    (RAND Corporation)

Abstract

We study transitions between different types of formal and informal employment using retrospective job histories from a new survey in Bangladesh. Workers transitioning between jobs are most likely to remain in the same type of employment, although there is still substantial churn across employment types. Private wage employees have higher probability of transitioning to a new job, and changes in earnings and benefits suggest evidence of upward mobility. Nevertheless, there is also non-trivial risk of downward mobility, especially for those transitioning into casual employment, which has the lowest level of earnings and benefits and the highest levels of exposure to workplace hazards and violence. Overall, the informal sector appears to include subpopulations consistent with both the traditional view that it is a segmented portion of the labor market with few prospects of upward mobility, and with the alternative view that it is a dynamic, entrepreneurial alternative to wage employment.

Suggested Citation

  • Italo A. Gutierrez & Krishna B. Kumar & Minhaj Mahmud & Farzana Munshi & Shanthi Nataraj, 2019. "Transitions between informal and formal employment: results from a worker survey in Bangladesh," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-27, December.
    • Handle: RePEc:spr:izamig:v:9:y:2019:i:1:d:10.1186_s40176-019-0141-2
    DOI: 10.1186/s40176-019-0141-2
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    Cited by:

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    2. Murshid, Nadine Shaanta & Irish, Andrew, 2020. "Understanding teen sex in Bangladesh: Results from Global School Health Survey 2014," Children and Youth Services Review, Elsevier, vol. 119(C).
    3. Sevinç Tunali, 2019. "Trends that Shaping Education in Bangladesh," Asian Journal of Education and Training, Asian Online Journal Publishing Group, vol. 5(4), pages 548-554.
    4. Panchanan Das, 2023. "Creation and Destruction of Jobs in Urban Labour Market: Role of Gender, Caste and Religion in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 66(1), pages 225-237, March.
    5. Abiodun O. Folawewo & Olusegun A. Orija, 2020. "Informal-formal workers' transition in Nigeria: A livelihood analysis," WIDER Working Paper Series wp-2020-146, World Institute for Development Economic Research (UNU-WIDER).
    6. Kanbur, Ravi & Ronconi, Lucas & López-Cariboni, Santiago, 2020. "Who demands labour (de)regulation in the developing world? Insider–outsider theory revisited," CEPR Discussion Papers 14277, C.E.P.R. Discussion Papers.
    7. Brian McCaig & Nina Pavcnik, 2021. "Entry and Exit of Informal Firms and Development," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 69(3), pages 540-575, September.
    8. Bossavie, Laurent & Görlach, Joseph-Simon & Özden, Çağlar & Wang, He, 2024. "Capital Markets, Temporary Migration and Entrepreneurship: Evidence from Bangladesh," World Development, Elsevier, vol. 176(C).
    9. Bossavie,Laurent Loic Yves & Gorlach,Joseph-Simon & Ozden,Caglar & Wang,He, 2021. "Temporary Migration for Long-term Investment," Policy Research Working Paper Series 9740, The World Bank.
    10. Lucas RONCONI & Ravi KANBUR & Santiago LÓPEZ‐CARIBONI, 2023. "Who demands labour (de)regulation in the developing world? Revisiting the insider–outsider theory," International Labour Review, International Labour Organization, vol. 162(2), pages 223-243, June.

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    More about this item

    Keywords

    Informal labor; Self-employment; Casual workers; Job transitions; Working conditions; Job benefits;
    All these keywords.

    JEL classification:

    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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