Employment Choice and Mobility in Multisector Labor Markets

Theoretical Model and Evidence from Ghana

This paper examines employment choice and occupational mobility using data from Ghana in a model that incorporates capital market failure, credit constrained individuals and draw self-employment capital from family asset.


Author: Olumide Taiwo

Publication Date: November, 2012

Keywords: Employment Choice; Mobility; Multisectoral Labor Markets; Self Employment

JEL Classifications: J01, J21, J24, N37, O12, O17


This paper examines employment choice and occupational mobility using data from Ghana. In a model that incorporates capital market failure, credit constrained individuals draw selfemployment capital from family asset. The empirical findings validate the predictions of the theoretical model. The data shows very low rates of mobility across sectors and that workers in family enterprise are the most mobile while self-employed workers are the least mobile. I find no robust evidence that wage earnings ease liquidity constraints. The findings suggest that both liquidity and skill transferability constraints are important for mobility.

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