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

Author

Listed:
  • Gong, Xiaodong
  • Van Soest, Arthur
  • Villagomez, Elizabeth

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.

Suggested Citation

  • Gong, Xiaodong & Van Soest, Arthur & Villagomez, Elizabeth, 2004. "Mobility in the Urban Labor Market: A Panel Data Analysis for Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 53(1), pages 1-36, October.
    • Handle: RePEc:ucp:ecdecc:y:2004:v:53:i:1:p:1-36
    DOI: 10.1086/423251
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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