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Labor Market Flows: Evidence from Chile Using Micro Data from Administrative Tax Records

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  • Elías Albagli
  • Alejandra Chovar
  • Emiliano Luttini
  • Carlos Madeira
  • Alberto Naudon
  • Matías Tapia

Abstract

Using administrative tax records for all formal Chilean firms and employees, we compute and characterize several labor flow measures. Our results show that labor mobility in Chile is large for international standards, with the reallocation rate averaging 37% over the last decade, the highest value among the 25 OECD countries with comparable data. The magnitude of labor reallocation is highly heterogeneous among firms and industries, being highest in Agriculture and Construction. Job reallocation is also high for smaller companies, especially due to high rates of firm creation and destruction, and for firms that pay lower wages. Finally, there is a significant procyclical behavior of workers’ entry rate, and, in smaller magnitude, a countercyclical reaction of the exit rate, which is consistent with international evidence that shows job creation to be the main adjustment mechanism over the business cycle.

Suggested Citation

  • Elías Albagli & Alejandra Chovar & Emiliano Luttini & Carlos Madeira & Alberto Naudon & Matías Tapia, 2017. "Labor Market Flows: Evidence from Chile Using Micro Data from Administrative Tax Records," Working Papers Central Bank of Chile 812, Central Bank of Chile.
  • Handle: RePEc:chb:bcchwp:812
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    References listed on IDEAS

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    1. Bassanini, Andrea & Garnero, Andrea, 2013. "Dismissal protection and worker flows in OECD countries: Evidence from cross-country/cross-industry data," Labour Economics, Elsevier, vol. 21(C), pages 25-41.
    2. Olympia Bover & Pilar García-Perea & Pedro Portugal, 2000. "Labour market outliers: Lessons from Portugal and Spain," Economic Policy, CEPR;CES;MSH, vol. 15(31), pages 379-428, October.
    3. Olympia Bover & Ramón Gómez, 2004. "Another look at unemployment duration: exit to a permanent vs. a temporary job," Investigaciones Economicas, Fundación SEPI, vol. 28(2), pages 285-314, May.
    4. Macarena García & Alberto Naudon, 2012. "Dinámica Laboral en Chile," Working Papers Central Bank of Chile 659, Central Bank of Chile.
    5. John M. Abowd & Patrick Corbel & Francis Kramarz, 1999. "The Entry And Exit Of Workers And The Growth Of Employment: An Analysis Of French Establishments," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 170-187, May.
    6. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, vol. 95(1), pages 25-49, March.
    7. Carlos Madeira, 2015. "Identification of Earning Dynamics using Rotating Samples over Short Periods: The Case of Chile," Working Papers Central Bank of Chile 754, Central Bank of Chile.
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