Job finding and separation rates in an economy with high labor informality

Nikita Cespedes Reynaga and Nelson R. Ramírez-Rondán

No 166, Working Papers from Peruvian Economic Association

Abstract: Job finding and separation are not well studied in economies with high labor informality. In this paper we contribute to filling the gap in the literature of labor turnover, proposing a methodology to estimate both indicators in an economy with high informality. To this end we estimate indicators of job finding and separation rates for Peru's developing economy, in which labor informality stands at 70 percent. We find that, on average, these indicators in the formal sector are similar to those estimated in developed economies; however, in the informal sector the calculated indicators are approximately two times higher than those of the formal sector. The two indicators show considerable heterogeneity in the informal sector according to several observable categories; in addition, the separation rate is countercyclical and the finding rate is procyclical, this cyclicality being greater in the formal sector.

JEL-codes: E24 E26 J63 J64 O17 (search for similar items in EconPapers)
Date: 2020-04
New Economics Papers: this item is included in nep-iue, nep-lab and nep-mac
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Chapter: Job Finding and Separation Rates in an Economy with High Labor Informality* (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:apc:wpaper:166

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