Interactions between Formal and Informal Labor Dynamics: Revealing Job Flows from Household Surveys

Abstract

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Building an Equitable Society in Colombia

“…Flórez et al (2020) argue that this is often a symptom of rigidities caused by economic policies and institutions, such as rigid labor regulations or very high minimum wages. Although this evidence ignores job transitions within the informal sector or between the formal and informal sectors, Morales, Hermida, and Dávalos (2019) find that the informal sector has even less fluidity than the formal one in Colombia. This is because most informal jobs are in self-employment, transitions from the informal to the formal sector are limited, and job-to-job transitions within the informal sector are not very common.…”

Labor Market Indicator for Colombia

“…In order to capture the labor overflow in the economy, we also included the measure of churning (CH), which reflects the ratio between workers and job reallocations. We use the series proposed by Morales et al (2018), who provide a measure of labor flows for wage and non-wage workers. This is a more comprehensive approach to understand flows than just focusing on wage workers from firm-level data Morales and Medina (2016) and Flórez et al (2017).…”

Labor Market Indicator for Colombia (LMI)

“…The main source of information regarding the labor market in Colombia is the household survey monthly published by DANE, but in recent years other aspects of the labor market are gathered in opinion surveys, administrative records, and industrial and commerce surveys. For instance, business expectations and vacancies are computed and published by Banco de la República (BR) and with more recent information of household surveys flow measures can be constructed Morales et al (2018). 5 Although it would be desirable to include the majority of indicators, extracting a signal in large specifications is more difficult and may lead to worse performance (e.g Boivin and Ng (2006); Ruiz and Poncela (2012), and Bańbura and Modugno (2012) Table 1.…”

“…In order to capture the labor overflow in the economy we also included the measure of churning (CH) which reflects the ratio between workers and job reallocations. We use the series proposed by Morales et al (2018), who provide a measure of labor flows for wage and non-wage workers. This is a more comprehensive approach of understanding flows than just focusing on wage workers from firm level data Morales and Medina (2016) and Flórez et al (2017).…”