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Labour Market Entry and Earnings: Evidence from Tanzanian Retrospective Data

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

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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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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  1. Teal, Francis, 2011. "The price of labour and understanding the causes of poverty," Labour Economics, Elsevier, vol. 18(S1), pages S7-S15.
  2. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, July.
  3. 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.
  4. Sicherman, Nachum & Galor, Oded, 1990. "A Theory of Career Mobility," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 169-92, February.
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  8. Falco, Paolo & Maloney, William F. & Rijkers, Bob & Sarrias, Mauricio, 2012. "Heterogeneity in Subjective Wellbeing: An Application to Occupational Allocation in Africa," IZA Discussion Papers 7057, Institute for the Study of Labor (IZA).
  9. 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.
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  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. Rosella Gardecki & David Neumark, 1998. "Order from chaos? The effects of early labor market experiences on adult labor market outcomes," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 51(2), pages 299-322, January.
  13. 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.
  14. 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.
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