Labour mobility during transition
Evidence from Georgia

Authors: Bernabè, Sabine¹; Stampini, Marco²

Source: Economics of Transition, Volume 17, Number 2, April 2009 , pp. 377-409(33)

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Abstract:

This article deals with labour mobility in Georgia during economic transition. We use quarterly 1998-99 panel data to examine mobility across six labour market statuses (inactivity, unemployment, formal wage employment, informal wage employment, self-employment and farming). Our findings are consistent with the hypothesis of labour market segmentation. Formal employment is preferred to informal employment. Unemployment is largely a queuing device for individuals with higher education waiting for formal jobs. Some self-employment is subsistence activities and consistent with a segmented labour market, while other is high risk and potentially high return activities. Age, gender and education are significant determinants of labour mobility. Finally, informal employment serves as a buffer in times of recession - with farming and informal wage employment absorbing labour shed by other statuses during the Russian financial crisis.

Keywords: J21; P23; Labour mobility; informal labour; transition; Georgia

Document Type: Research article

DOI: http://dx.doi.org/10.1111/j.1468-0351.2009.00345.x

Affiliations: 1: LICOS Centre for Institutions and Economic Performance, Katholieke Universiteit Leuven, Belgium., Email: sabine.bernabe@econ.kuleuven.be 2: Development Research Department, African Development Bank, Tunis, Tunisia., Email: m.stampini@afdb.org

Publication date: 2009-04-01