For Better or For Worse: Job and Earnings Mobility in nine Middle and Low Income Countries

This article summarizes the findings of an ongoing study examining worker flows and, when possible, the associated earnings changes associated with such flows across different statuses in the labor market and across different types of jobs. The study focuses on three countries in Latin America and six transition economies of eastern Europe and the former Soviet Union. Although the selection of countries is driven by the existence of longitudinal data, essential for a study of worker mobility, this selection of countries has the bonus of spanning low- and middle-income economies, as well as transition and developing countries. We address a number of questions. Central to the question of the nature of labor mobility is assessing to what extent workers transit quickly across jobs or become stuck in long periods of unemployment. Another central issue is to what extent mobility implies welfare gains or losses relative to those workers who did not change their status in the labor market. A third question, much discussed in the development literature, is to what extent workers in low- and middle-income countries experience barriers to entry into good (that is, “formal”) jobs and thus become trapped in low-productivity and low-paying jobs.