Labor Market Dynamics and Development*

Kevin Donovan, Will Jianyu Lu and Todd Schoellman

The Quarterly Journal of Economics, 2023, vol. 138, issue 4, 2287-2325

Abstract: We provide new evidence on how labor market dynamics vary with development. We build a new data set consisting of harmonized microdata from rotating panel labor force surveys covering 80 million people from 49 countries. Labor market flows, such as the job-finding or employment exit rate, are higher in developing economies. These higher flows largely reflect a slippery job ladder: workers transition frequently to and from marginal employment without climbing to or persisting in better-paying jobs. Subsistence self-employment and different patterns of selection for wage workers each play a role in our findings and are useful avenues for future theories of labor market frictions.

Date: 2023
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Working Paper: Labor Market Dynamics and Development (2020)
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