nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2020‒04‒20
one paper chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Job finding and separation rates in an economy with high labor informality By Nikita Céspedes Reynaga; N.R. Ramírez-Rondán

  1. By: Nikita Céspedes Reynaga; N.R. Ramírez-Rondán
    Abstract: Job finding and separation are not well studied in economies with high labor informality. In this paper we contribute to filling the gap in the literature of labor turnover, proposing a methodology to estimate both indicators in an economy with high informality. To this end we estimate indicators of job finding and separation rates for Peru's developing economy, in which labor informality stands at 70 percent. We find that, on average, these indicators in the formal sector are similar to those estimated in developed economies; however, in the informal sector the calculated indicators are approximately two times higher than those of the formal sector. The two indicators show considerable heterogeneity in the informal sector according to several observable categories; in addition, the separation rate is countercyclical and the finding rate is procyclical, this cyclicality being greater in the formal sector.
    JEL: E24 E26 J63 J64 O17
    Date: 2020–04

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