For the most vulnerable recipient families short run

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Unformatted text preview: time transition matrix for each period obtained following the procedure by Geweke et al. (1986) outlined in Bosch and Maloney (2009) Section III. Computations are based on 10.000 Monte Carlo replications. The series have been smoothed using a 4 quarter moving average to remove high frequency fluctuations. The bottom panels shows the series logged and de‐trended using an HP filter with lambda 1600. Data for Mexico (left panels) is drawn from the quarterly National Urban Labor Survey (ENEU) from 1987:Q1 to 2004:Q4. Data for Brazil (right panels) is drawn from the Monthly Employment Survey (PME), quarterly averaged from 1983:Q1 to 2001:Q2. Shaded areas indicate recessions. 120 Annex II: Cyclical changes in the level of disguised unemployment in the informal sector The Mexican employment survey suggests that there is a component of informality that correspond to disguised unemployment and which varies as expected over the business cycle.. Figure 3 plots the proportion of workers who respond positively to the question “Have you been looking for a job over the last two months?” and who had not changed employment status from the quarter before as a possible proxy for the degree of dissatisfaction with the current job coupled with the availably of alternative jobs. Search intensity is generally higher in the informal salaried sector, perhaps, reflecting the relative youth of that group although the magnitudes (and hence differences) are not large: in the upturns of mid‐ 1990s and 2000, search rates were equal across sectors at roughly 1‐2%. These very low levels suggest that we may not be fully capturing the degree of involuntariness in the sector. As additional information, the National Microenterprise survey suggests that in 1992, roughly 65% of those entering informal self employment from formal salaried work replied doing so voluntarily. The rate of search is equivalent to the formal sector at this time, and somewhat below the informal salaried sector suggesting a higher degree of involuntary entry there. The share searching is strongly countercyclical implying that as the labor market becomes slack and the access to the formal sector from all sectors decreases, dissatisfaction increases. In the informal sectors, the percentage searching for better jobs peaks at just under 7% during the 1995 crisis, a gap of slightly over 4% points over the formal sector . This suggests that in fact the sector contained more workers who were forced into bad matches. This makes sense if during the crisis only the informal sector was hiring and absorbing more unemployed as a share of the workforce than during booms. 0 .02 .04 .06 .08 Figure 3: Searching While Employed: Mexico 1987q1 1991q3 1996q1 Searching(F) Searching(I) 2000q3 2005q1 Searching(S) Note: Quarterly data from the National Urban Labor Survey (ENEU) 1987:Q1 to 2004:Q4. Searching (j) refers to the proportion of employed workers in sector j who claim to be looking for a new job and have not changed employment status in the previo...
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