Is it easy joining to formality? A labor trajectories approach in the mexican labor market

Abstract

More than half of Mexico's workforce is in informal economy; however, there are a high number of transitions from informal to formal employment in the short term, which has been interpreted as evidence that informality is an alternative to improve well-being. The main objective of this study is to analyze the employment conditions and job stability of employees who are inserted into the formal market, after starting their labor trajectory in the informal market. We use the Módulo de Trayectorias Laborales (MOTRAL) 2015, a survey with national representativeness of Mexican urban areas. We compare emplyment conditions and job stability in 2010 among formal employment using two groups: those who had their first job in informality and those who had their first job in formality. Transition matrices are built between first employment, employment in 2010, and 2015 to corroborate the high mobility found by previous literature; employment conditions and job stability are then analyzed with multivariate models. The results indicate that a significant proportion of those who started in informality subsequently had access to formal jobs. However, access to formal employment from informality occurs under conditions of disadvantages concerning access and job stability, without these subsequently disappearing. Then, the start of working life in informality is associated with permanent disadvantages in the labor market.