Job Finding and Separation Rates in an Economy with High Labor Informality

Abstract Job finding and separation are not well studied in economies with high labor informality. In this chapter, 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...

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Bibliographic Details
Published inWorkplace Productivity and Management Practices Vol. 49; pp. 277 - 302
Main Authors Reynaga, Nikita Céspedes, Ramírez-Rondán, Nelson R.
Format Book Chapter
LanguageEnglish
Published United Kingdom Emerald Publishing Limited 2021
Subjects
Demographic Economics/Trends
Economics
Labour Economics
job duration
informality
job destruction
business cycle
Job creation
Peru
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Summary:Abstract Job finding and separation are not well studied in economies with high labor informality. In this chapter, 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%. 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.
ISBN:9781801176750
1801176752
ISSN:0147-9121
DOI:10.1108/S0147-912120210000049010