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 (), Andrea Otero-Cortes, Nadine Riedel, Matias Tapia, Tanisa Tawichsri and Verena Wiedemann ()
Additional contact information
Anne Brockmeyer: World Bank
Francois Gerard: University College London
Linda Wu: University of British Columbia
Verena Wiedemann: Wolrd Bank

No 06-26, Documentos de Trabajo (working papers) from Instituto de Economía - IECON

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)
Pages: 39 pages
Date: 2026-06
References: Add references at CitEc
Citations:

Downloads: (external link)
https://hdl.handle.net/20.500.12008/55565

Related works:
Working Paper: Formal Labor Market Dynamics and Development (2026)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ulr:wpaper:dt-06-26

Access Statistics for this paper

More papers in Documentos de Trabajo (working papers) from Instituto de Economía - IECON Contact information at EDIRC.
Bibliographic data for series maintained by Lorenza Pérez ().