On the Measurement of Positive Labor Market Mobility

The present article proposes a new labor market index, called the positive labor market mobility index, which focuses on quantifying the amount of “desired” labor market mobility present in the transitions of young individuals, providing a useful way of comparing countries on that matter. Well-established indices in the literature aiming at measuring mobility take into account all movements among states and/or the diagonal elements of the transition probability matrix that denote immobility. On the contrary, the index proposed in this study uses only “favorable” or “desired” movements among labor market states, providing a more relevant to labor mobility assessment index, where the interest lies in quantifying positive transitions, from education or training to employment, for example. The positive mobility index is estimated for individuals in Europe, whose age was 15 to 29 during the years of the financial crisis, from 2008 to 2015. Annually raw micro-data from the European Union Labour Force Survey (EU-LFS) for these 8 years are used for this purpose. Moreover, the values of the proposed labor market mobility index are correlated with an early job insecurity indicator, estimated for the same age group. The results reveal the significant differences among European countries, when “desired” transitions of young individuals are taken into account. Moreover, the analysis performed indicates that the proposed index could be a good predictor for the degree of early job insecurity for young individuals in EU member states.