This paper provides a selective review of evidence from labor markets in low-income countries. The aim is to synthesize this literature to consolidate what is known about the key drivers of worker outcomes (including those of micro-entrepreneurs), firm behavior, and the interaction between firm s and workers. We draw on cross-country and within-country evidence utilizing a wide range of research designs, as well as novel evidence from ongoing studies. On firms, we discuss the firm size distribution, constraints to firm expansion, and informality.
On workers we discuss the role of training, non-cognitive skills and the worker-firm matching process. Throughout, we place emphasize on understanding the role of institutions and the state in determining these outcomes.
Author: Imran Rasul