**Figure 10: Six-yearly transition matrices for females aged 20-53 in Mexico and Egypt**

||Private informal|**7**<br>22|21|2|47|21% (21%)|
|---|---|---|---|---|---|---|
||Private formal|7<br>**22**|21|2|47|19% (22%)|
|Mexico|Public formal|7<br>22|**21**|2|48|7% (7%)|
||Unemployed|7<br>22|21|**2**|48|2% (2%)|
||Out of labor force|7<br>22|21|2|**48**|50% (48%)|
||Private Inf|ormal<br>Private|Formal|Public|Unemployed|OLF|
||Private informal|**32**|2<br>2<br>2||62|9% (11%)|
||Private formal|18|**28**|17|3<br>34|1% (2%)|
|Egypt|Public formal|3<br>2||**84**||1<br>10<br>10% (10%)|
||Unemployed|8<br>2<br>4<br>**13**|||73|7% (5%)|
||Private informal<br>Out of labor force|9<br>1<br>1<br>5<br>Private formal|<br>Public|**84**<br>formal<br>U|n-employed<br>O|73% (73%)<br>ut of labor force|

_Notes_ . The upper panel is simulated by Monte Carlo Method described in Section 4 Methodology. 100,000 simulations of transitions after six years were performed for each initial state, where the transition probability matrix per period is taken from the empirical annual transition matrix in Figure 8. The annual transition matrix relies on panel data from the ENOE in 2005 Q1 and 2006 Q1. We restrict our analysis to women aged 20 to 53 who were interviewed in both rounds. We use transition matrices to examine individuals’ transition of their work status/sector between the two dates. We rely on the market definition of work status, search required (reference 1 week). The percentages reported at the end of each row show the shares of individuals in each employment status/sector in 2005 Q1, with the shares in 2006 Q1 reported in brackets. Panel weights are used. The lower panel relies on panel data from the Egypt Labor Market Panel Survey in 2012 and 2018. We restrict our analysis to individuals who were interviewed in both rounds. We focus on those aged at least 20 years old in 2012 and at most 59 years old in 2018. We use transition matrices by sex to examine individuals’ transition between their work status/sector in 2012 and their work status/sector in 2018. We rely on the market definition of work status, search required (reference 1 week). The percentages reported at the end of each row show the shares of individuals in each employment status/sector in 2012, with the shares in 2018 reported in brackets. Panel weights are used.

The convergence seen in the upper panels of Figure 9 and Figure 10 shows that there is no labor market persistence in Mexico after six years – regardless of the initial state one finds oneself at the beginning, the transition probability distributions are almost identical. This result is subject to certain limitations. As the Markov chains assume memoryless-ness and hence a constant rate of transition, the simulations will tend to over-state dynamism in the labor market. Such caveats are discussed in further detail in Appendix A.2. However, as Appendix A.2 shows, this over-statement is not unreasonably large. The simulations therefore still provide evidence in support of the remarkable dynamism of Mexico’s labor market. Further details on how the transitions take place in Mexico can be found in the per-period simulations in Appendix A.3, which shows that persistence in Mexico ends after 3 years for men and 4 years for women.

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