Labor flows in Venezuela 1997-2013
This paper measures worker gross flows and instantaneous transition probabilities in Venezuela from 1998 to 2013. We assemble a panel dataset, which is the source of our flow calculations. We contribute to the literature by separating flows from the formal sector employment and from the informal sector employment, which has a significant share of the working` population in Venezuela, to analyze flows between four labor market states. We decompose the contribution of each flow into the cyclical variation of the unemployment rate, the employment-to-population ratio, and the informality rate. This paper finds that change in unemployment is associated mainly with the flow from employment to unemployment. Moreover, the informal sector workers do contribute to fluctuations in the unemployment rate in a larger proportion than the formal sector workers.