Abstract
This paper evaluates the unemployment duration and labor mobility using data from the household surveys provided by the National Statistical office (INDEC) for the period 1998 to 2005. The paper aims to understand and explain the evolution and main determinants of labor mobility and unemployment duration, two of the main problems that labor markets present. Unemployment duration is studied in terms of welfare and its determinants by applying stochastic dominance and econometric techniques. Labor mobility is analyzed using conditional multinomial probit techniques in order to evaluate its evolution, the impact of a crisis and the recovery period, that Argentina faced over the period 1998-2005. We found that there was deterioration in welfare measured by unemployment duration especially during the crisis period. We found that human capital played a key role in the unemployment duration and labor mobility. Unemployment duration is higher for people with higher educational levels, which shows that less educated people have lower reservation wages; similar result was found for females and males. The labor mobility results show that more educated people enter easier to formal labor markets which changes during the crisis when their probability of entering to formal labor market reduces; this would suggest that more educated people tend to adjust their wages and push out of the market less educated people. The labor mobility patterns do not reflect inflexibility in labor markets. We conclude that the apparent duality-formal and informal-in the Argentinean labor market which seems to reflect differences in access to productive resources (human capital) outside labor market is the one that determines the integration into labor markets and later labour mobility of a big part of labor force.
Highlights
One of the main problems economy faces is labor market distortions, among which two of the most important are labor mobility and unemployment
We found that there is a different effect between educational levels: lower educational levels have lower unemployment duration which supports part of the empirical evidence presented before, we observe that the crisis period had harmful effect specially on the higher educational level groups, the incidence over unemployment duration decreased more in this group than in the lower educational levels group
This document analyzes the evolution and the determinants of unemployment duration and labour mobility in Argentina using household surveys carried out by INDEC from 1998 to 2005. During this period many changes have been going on in the labor markets. They affected unemployment duration and labour mobility mainly due to the effects caused by the crisis period, recession and recovery in Argentina
Summary
One of the main problems economy faces is labor market distortions, among which two of the most important are labor mobility and unemployment. Over the last 20 years Argentina showed high levels of economic growth with a sudden stop due to one of the biggest economic crises in its history, which had negative effects on the welfare of the country and the region This crisis period had direct effects on the Argentinean labor market, resulting in increased unemployment, increased job-searching time, and labor mobility pushing workers towards the informal sectors of the economy characterized by lower wages and lack of benefits. The need to find a job was confronted with the possibility of not finding one that remunerates according to the educational level or the family situation For this reason it is necessary to analyze unemployment duration as part of labour mobility, because depending on the characteristics of each individual, the time of search for formal or informal employment varies
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