Gender and Job Search in Developing Country Labor Markets

• Author: Bradford F. Mills
• DOI: http://doi.org/10.1111/0019-8676.411997004
• Date: 01 January 1997
• Published date: 01 January 1997

Gender and Job Search in

Developing Country Labor Markets

BRADFORD F. MILLS*

GenderandJobSearch Gender discrimination in developing country labor markets raises the concern

that women may be unable to find alternative employment following public-

sector job loss. Theoretical and empirical results in this article suggest that, in

segmented labor markets, observed unemployment spells may actually be

shorterforwomenthanformen.Thisisaresultoftherelativelystrongincentive

wage-sector discrimination creates for women to accept more readily available,

but less-remunerative, nonwage-sector positions.

Introduction

Two commonly held assumptions about developing country labor mar-

kets raise the concern that women who leave the public sector as part of

downsizing efforts will have more difficulty than their male counterparts

in finding new private-sectorpositions. The first is that gender discrimina-

tionin the wage sector isa common facet of developingcountrylabor mar-

kets. The second is that public-sector wage-employment opportunities are

generally believed to be more equitably distributed than private-sector

opportunities. This article shows, however, that when labor markets are

segmented into a rationed wage sector and an unrationed nonwage sector,

discriminationagainst women in the wage sector leads toshorter durations

of unemployment following loss of public-sector employment.

61

* Bradford Mills is a research fellow at the International Service for National Agricultural Research.

Thisarticleis based on the author’sdoctoral dissertation at theUniversityof California at Berkeleyandwas

undertakenasa research support specialist withtheCornell University Food and NutritionPolicy Program.

Particular thanks are expressed to Jeff Perloff, Elizabeth Sadoulet, and DavidSahn for helpful comments

and to Glen Sueyoshi for provision of FORTRAN code for the estimator.

INDUSTRIAL RELATIONS, Vol.36, No. 1 (January1997). © 1997 Regents of the University of California

Published by Blackwell Publishers, 350 Main Street, Malden, MA 02148, USA, and 108Cowley Road,

Oxford, OX4 IJF,UK.

Atheoretical model is used to show that this is the result of the relatively

strong incentives discrimination provides to forsake wage-sector job

search and accept more readily available nonwage employment. An

empirical model of the duration of unemployment before exit into the

wage or nonwage sector then supports this finding using data on

retrenched public-sector workers in Conakry, the capital of the West Afri-

can state of Guinea. The data also suggest that premiums for wage-sector

employment and severance payments from public-sector compensation

schemes have important impacts on the duration of unemployment.

The next section of the article develops a model of employment search in

a segmented labor market following public-sector job loss. The model

assumes that nonwage employment is a second best, but commonly pur-

sued, employment option and that gender discrimination results in a lower

probability of females receiving wage-employment offers during job

search. The following section presents a semiparametric estimator of the

duration of unemployment following public-sector job loss when the prob-

abilities of exits into the wage and nonwage sectors are correlated. The data

setof former public-sector workers in Conakry isthen discussed. This is fol-

lowed by a presentation of the estimated results of the model and a discus-

sionofthe implications of the results and the salientfindingsofthearticle.

The Theory

Most empirical models of job search have examined departures from

unemploymentintoa single employment state. In these modelsjob search-

ersinanyperiod are typically assumed to face a fixed probability of receiv-

ing a wage offer and a distribution of possible levels of remuneration

accompanying the offer.1In developing country labor markets, however,

nonwage activities often provide the majority of employment opportuni-

ties. Further, the mechanisms that generate wage-sector opportunities dif-

fer significantly from those generating opportunities in the nonwage

sector. A more relevant job-search model for developing country labor

markets will account for the distinct employment opportunities available

in the wage and nonwage sectors.

Wage-sectorpositions are assumed preferred because they offer either a

compensation premium, greater stability in employment and income, or

greater access to in-kind or other benefits.2Individuals are therefore will-

62 / Bradford F. Mills

1For a review of the theory of basic models of job search, see Lippman and McCall (1976).

2These preferences were confirmed by extensive discussions with former public-sector workers in

Conakry, Guinea.