Job stability in developing and developed countries: Evidence from Columbia and the United States

Jan 1, 2001
By: Schaffner JA Economic Development and Cultural Change 511 - 535
Abstract
The article is organized as follows. The next section introduces the data and basic descriptive statistics, indicating that the typical worker in private-sector wage employment has been on the job for a much shorter time in Colombia than in the United States. In the following section I use two methods, careful conditioning of current job-tenure comparisons and calculation of job-retention probabilities derived by following synthetic cohorts over time across cross sections, to demonstrate that the typical job is indeed much less likely to last a long time in Colombia than in the United States. In particular, there appears to be much more "churning" of low-tenure workers in Colombia. The next two sections largely eliminate two potential explanations for the cross-country differences in job length. The first assesses whether the faster rotation of low-tenure workers in Colombia might be the effect of counterproductive job-security legislation. The second considers the extent to which long-lasting jobs may be less prevalent in Colombia merely because Colombia is specialized in production activities in which long-lasting employment relationships are less valuable. Although caveats must be placed on the results, they are consistent with the hypothesis that long-term employment contracting costs are higher in Colombia than in the United States and, perhaps more generally, in developing countries than in developed countries. The penultimate section sets the stage for future research by proposing reasons why the cost of long-term employment contracting may be higher in developing countries, and this is followed by a brief conclusion.
Copy Citation Schaffner, J. A. (2001). Job stability in developing and developed countries: Evidence from Columbia and the United States. Economic Development and Cultural Change, 49(3), 511-535. doi:10.1086/452513 Copied to clipboard.
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