Labor Market Dynamics and Development; Kevin Donovan (Yale University)

Abstract

We study labor market flows across countries by building a dataset of the harmonized individual-level responses from rotating panel labor force surveys covering 42 countries across a wide range of development. Standard relationships between flows and income derived within rich countries reverse when considering the broader set of countries our dataset covers. We then provide new evidence on the structure of employment flows across countries. Our results suggest that poor countries are characterized by a high risk of "falling off" low rungs of the job ladder, which are made up of both self-employment and low-earning wage jobs. These low-earnings wage jobs account for most of the differential separation from wage employment across countries, as flows at higher earnings are similar across countries. One-third of this relationship is accounted for by cross-country differences in occupational structure. Along the way, we provide several new facts on how cross-country labor market flows vary by demographics, education, occupation, and other characteristics.