VoxDev Development Economics S7 Ep3: Why labour markets look different in low-income countries
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Jan 15, 2026 In this engaging discussion, Supreet Kaur and Emily Breza, researchers in development economics, dive into the unique challenges facing labor markets in developing countries. They reveal startling statistics on low wage-employment rates and the prevalence of casual, short-term jobs. The pair also explore how self-employment often acts as a safety net and why flexibility is favored over stable jobs. With insights into the roles of social networks and optimistic jobseekers, they highlight urgent policy gaps needed to improve job conditions for millions.
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Self-Employment As A Safety Net
- Self-employment in developing economies often acts as a fallback rather than a growth-oriented firm.
- When prevailing wage wage work becomes available, many immediately abandon small businesses to take wage jobs.
Flexibility Beats Formality For Many Workers
- Workers often prefer day-to-day casual work because it offers flexibility despite instability.
- Many decline formal full-time jobs and churn rates in 'good' jobs are high due to disamenities and preference for flexibility.
Networks Are Central To Job Search
- Social networks and referrals are central to job search because search is costly and jobs cluster away from where workers live.
- Workers often travel to central areas and rely on contacts to overcome search frictions.