IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Labor Market Transitions in Peru

Listed author(s):
  • Javier Herrera


    (DIAL, IRD, Paris)

  • Gerardo David Rosas Shady


    (Inter American Development Bank, University of Paris 1 Panthéon-Sorbonne, DIAL)

(english) Traditional labor market analysis based solely on the net unemployment rate fails to explain the apparent paradox between a relatively moderate unemployment rate in Peru (around 10%, with a weak sensibility to wide macroeconomic fluctuations), and the fact that unemployment is one of the major issues in Peru. One possible explanation is that this static indicator of cross section net unemployment balance is compatible with high flows in and out of employment states. To address these issues we needed to conduct a dynamic analysis using panel data. Using the Peruvian national household survey (ENAHO), we constructed a panel of working age individuals at the national level for the period 1997-1999. Like previous work in developing countries, we found that there is an important degree of job mobility in Peru. We also found that most of the transitions occur between employment and inactivity instead of between employment and unemployment. We also showed that the rate of permanent unemployment is very low so that unemployment would be essentially a frictional phenomenon. Further, considering the different transition states, we elaborated an unconditional transition profile, including individual and household characteristics, like gender, age and education levels for example, associated with each transition status. Finally, after examining these labor market transitions and the possible sample selection bias, we estimated a multinomial logit model. This model allowed us to appreciate the (conditional) incidence of individual and household characteristics as well as the effects of different shocks on the labor transition states. _________________________________ (français) Les analyses traditionnelles du marché du travail s’avèrent incapables d’expliquer le paradoxe apparent entre un taux de chômage relativement modéré dans un pays tel que le Pérou (environ 10%, taux peu sensible aux fortes fluctuations macro-économiques) et la perception d’une grave crise de l’emploi. Une explication possible pourrait résider dans le fait que cet indicateur statique en coupe instantanée ne mesure pas les flux élevés entre les situations d’emploi et d’inemploi. Pour analyser ces questions, il est nécessaire de conduire une analyse dynamique sur données de panel. Nous avons ainsi construit un panel national d’individus en âge de travailler pour la période 1997-1999 à partir de l’enquête péruvienne auprès des ménages (ENAHO). Comme d’autres études réalisées dans des pays en développement, nous constatons qu’il existe une importante mobilité de l’emploi au Pérou. Nous trouvons également que la plupart des transitions interviennent entre emploi et inactivité plutôt qu’entre emploi et chômage. Le taux de chômage permanent apparaît très faible et le chômage serait donc essentiellement un phénomène frictionnel. Pour aller plus loin, nous avons élaborés des profils de transition inconditionnels, incluant les caractéristiques individuelles et du ménage, telles que le genre, l’âge, et le niveau d’éducation, associé avec chaque état de transition. Finalement, après avoir examiné ces transitions sur le marché du travail et les biais de sélection possibles, nous avons estimé un modèle logit multinomial. Ce modèle nous a permis d’apprécier l’incidence (conditionnelle) des caractéristiques individuelles et des ménages ainsi que des différents chocs sur les états de transition en matière d’emploi.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: First version, 2003
Download Restriction: no

Paper provided by DIAL (Développement, Institutions et Mondialisation) in its series Working Papers with number DT/2003/14.

in new window

Length: 25 pages
Date of creation: Nov 2003
Handle: RePEc:dia:wpaper:dt200314
Contact details of provider: Postal:
4, rue d'Enghien, 75010 Paris

Phone: + 33 1 53 24 14 50
Fax: + 33 1 53 24 14 51
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. 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.
  2. Cecilia Garavito, 1999. "Empleo y desempleo: Un análisis de la elaboración de estadísticas," Revista Economía, Fondo Editorial de la Pontificia Universidad Católica del Perú, issue 44, pages 103-144.
  3. Jaime Saavedra-Chanduví & Máximo Torero, 2000. "Labor Market Reforms and Their Impact on Formal Labor Demand and Job Market Turnover: The Case of Peru," IDB Publications (Working Papers) 43058, Inter-American Development Bank.
  4. Dancourt, Oscar, 1999. "Reforma neoliberal y política macroeconómica en el Perú," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
  5. Catalina Amuedo-Dorantes, 2000. "Work Transitions into and Out of Involuntary Temporary Employment in a Segmented Market: Evidence from Spain," ILR Review, Cornell University, ILR School, vol. 53(2), pages 309-325, January.
  6. Jaime Saavedra Chanduví & Eduardo Maruyama Sasaki, 2000. "Estabilidad laboral e indemnización: efectos de los costos de despido sobre el funcionamiento del mercado laboral peruano," Documentos de Investigación dt28, Grupo de Análisis para el Desarrollo (GRADE).
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:dia:wpaper:dt200314. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Loic Le Pezennec)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.