Formal Labor Market Dynamics and Development

Anne Brockmeyer, Francois Gerard, Gabriel Ulyssea, Linda Wu, Marcelo Bergolo (), Rodrigo Ceni Gonzalez, Benard Kirui, Andrea Lopez-Luzuriaga, Leonardo Morales, Otero-Cortés, Andrea, Nadine Riedel, Tapia, Matías, Tanisa Tawichsri and Verena Wiedemann
Additional contact information
Anne Brockmeyer: World Bank Group
Gabriel Ulyssea: UCL
Linda Wu: UBC
Marcelo Bergolo: IECON, Universidad de la República
Rodrigo Ceni Gonzalez: Universidad de la Republica
Benard Kirui: Privatisation Commission
Andrea Lopez-Luzuriaga: IADB and George Washington University
Leonardo Morales: Central Bank of Colombia
Otero-Cortés, Andrea: Central Bank of Colombia
Nadine Riedel: University of Munster
Tapia, Matías: Central Bank of Chile
Tanisa Tawichsri: Bank of Thailand
Verena Wiedemann: World Bank Group

No 18733, IZA Discussion Papers from IZA Network @ LISER

Abstract: This paper studies formal employment dynamics using linked employer–employee data from eight countries spanning a wide income range from Kenya to Chile. First, we show that formality rates increase with development, both between and within countries, because more workers enter the formal sector, not because they spend more time in formal jobs. Second, formal labor market fluidity increases with development, as workers hold more formal jobs, spend less time in each job, and less time between jobs. Third, greater fluidity is associated with higher life-cycle wage growth, which is largely accounted for by within- rather than between-firm wage gains.

Keywords: formal employment; labor market fluidity; economic development (search for similar items in EconPapers)
JEL-codes: J46 J63 O15 (search for similar items in EconPapers)
Date: 2026-06
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Related works:
Working Paper: Formal Labor Market Dynamics and Development (2026)
Working Paper: Formal Labor Market Dynamics and Development (2026)
Working Paper: Formal Labor Market Dynamics and Development (2026)
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