Pathways from school to work in the developing world

Giuseppe Dachille,Furio Camillo Rosati,Marco Ranzani,Marco Manacorda

doi:10.1186/s40175-016-0067-5

Abstract

This paper uses novel micro data from the ILO-STWT surveys to provide evidence on the duration, endpoint, and determinants of the transition from school to work in a sample of 23 low- and middle-income countries around the world. The paper analyzes both transition to the first job and to the first stable job. It also illustrates the effects of several correlates, including age of school leaving, gender, work while attending school, and others on the probability of transition and on its duration. The negative effects of low levels of human capital and high levels of population growth on job finding rates are offset by widespread poverty and lack of unemployment insurance, which lead overall to faster transitions in low-income compared to middle-income economies. By lowering reservation wages and speeding transitions, however, these forces lead to worse matches, as measured by the probability of attaining stable employment in the long run, highlighting the trade-off that policy makers face in developing countries.JEL Classification: J64, 057

Highlights

In this paper, we present novel evidence on transition durations from school to work and on the probability of ever finding employment and stable employment in a sample of 23 low- and middle-income countries around the world
We investigate the determinants of the heterogeneity in the transition duration and the probability of ever transiting to employment or to stable employment across individuals and countries
Despite the extreme pressure put on labor markets by demographic bulges that negatively affect job finding rates especially in Sub-Saharan Africa, transition durations are markedly lower in low-income countries compared to middle- and high-income countries due to a combination of widespread poverty and lack of unemployment insurance, both of which negatively affect reservation wages

Summary

Introduction

We present novel evidence on transition durations from school to work and on the probability of ever finding employment and stable employment in a sample of 23 low- and middle-income countries around the world.

Results

Conclusion