Labor market segmentation and occupational mobility in Algeria: Repeated cross-sectional and longitudinal analyses (2007 to 2012)

The paper identifies the determinants and the patterns of occupational mobility across the formal/informal employment divide as well as within the informal sector. Cross‐sectional analyses are applied to two samples (1,252 and 2,026 individuals) from two representative household surveys conducted in 2007 and 2012 in Bejaia, an east‐central region of Algeria. In the first place, using a Mincer earnings function shows there is a substantial wage gap regarding the formal/informal wage employment divide. However, human capital theory applies to formal employees rather than to informal ones. Hence, labor market segmentation is not reducible to earnings functions. In the second place, a multinomial logit model captures the determinants of occupational mobility, which depend on the characteristics of individuals: age, gender, marital status, and human capital. Finally, the paper explores from a longitudinal perspective a cohort of 445 individuals both surveyed in 2007 and 2012. The aforementioned determinants explain the patterns of occupational mobility of active individuals who experience a change that improves or deteriorates their job position, while shifting in both directions across the formal and the informal sector and within the informal sector.