Unemployment Duration and Labor Mobility in Argentina: A Socioeconomic-Based Pre- and Post-Crisis Analysis

Centro de Estudios Distributivos, Laborales y Sociales Working Paper No. 54

39 Pages Posted: 19 Jul 2007

See all articles by Gustavo J. Canavire-Bacarreza

Gustavo J. Canavire-Bacarreza

Inter-American Development Bank (IDB); IZA Institute of Labor Economics

Luis Fernando Lima

Universidad Nacional de La Plata - Department of Economics

Date Written: July 2007

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.

Keywords: Unemployment duration, labour mobility, stochastic dominance, count models, hazard models

JEL Classification: J62, J64, C41

Suggested Citation

Canavire Bacarreza, Gustavo Javier and Lima Soria, Luis Fernando, Unemployment Duration and Labor Mobility in Argentina: A Socioeconomic-Based Pre- and Post-Crisis Analysis (July 2007). Available at SSRN: https://ssrn.com/abstract=1000733 or http://dx.doi.org/10.2139/ssrn.1000733

Gustavo Javier Canavire Bacarreza (Contact Author)

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Luis Fernando Lima Soria

Universidad Nacional de La Plata - Department of Economics ( email )

1900 La Plata, Buenos Aires 1900
Argentina

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