An anatomy of labor market dynamics in the French Overseas Regions: A flow-based approach

I study the dynamics of worker flows and associated transition rates in the four historic French Overseas Regions and mainland France. Starting from the new version of the French Labour Force Surveys, I examine the size and the contributions of transition rates between employment, unemployment and non-participation to unemployment fluctuations for each of these territories. I then establish a number of key stylized facts. First, total quarterly gross flows are higher of an order of magnitude in the FOR than in mainland France. Transitions between unemployment and inactivity are the main cause of these differences. Second, people living in FOR are less likely to find a job when being non-employed and more likely to lose their jobs. Third, the origins of unemployment variations are multidimensional and not the same within FOR, the job finding rate having only a minor influence in explaining unemployment variance. Fourth, transitions implying jointly unemployment and non-participation explain more than 30% and until 54% of unemployment changes. Finally, it appears that women and young people are more likely to move from non-employment to employment and to withdraw from the labor force while high-skilled workers have more difficulties than in mainland France to find a job. Classification JEL: J60, J10, R23.