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Mobility, poverty and well-being among the informally employed in Bosnia and Herzegovina

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  • Krstic, Gorana
  • Sanfey, Peter

Abstract

We analyse informal-sector employment in Bosnia and Herzegovina (BH), using panel data from the Living Standards Measurement Studies. We derive four main conclusions. First, there is significant labour market mobility in BH, with education being an important factor in explaining movements from informal- to formal-sector jobs. Secondly, those in informal jobs are much more likely to suffer from poverty than formally employed people. Thirdly, earnings inequality is more pronounced in the informal sector than elsewhere. Fourthly, the informally employed report lower levels of life satisfaction compared with those in almost all other groups in the labour market. Overall, we conclude that, while the informal sector may represent a vital coping strategy for many, the formal sector provides much better prospects for prosperity and well-being.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Systems.

Volume (Year): 31 (2007)
Issue (Month): 3 (September)
Pages: 311-335

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Handle: RePEc:eee:ecosys:v:31:y:2007:i:3:p:311-335

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References

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  1. Peter Sanfey & Utku Teksoz, 2005. "Does transition make you happy?," Working Papers 91, European Bank for Reconstruction and Development, Office of the Chief Economist.
  2. Edward Christie & Mario Holzner, 2004. "Household Tax Compliance and the Shadow Economy in Central and Southeastern Europe," wiiw Balkan Observatory Working Papers 038, The Vienna Institute for International Economic Studies, wiiw.
  3. Rutkowski, Jan, 2003. "Rapid labor reallocation with a stagnant unemployment pool : the puzzle of the labor market in Lithuania," Policy Research Working Paper Series 2946, The World Bank.
  4. Rosser, J. Jr. & Rosser, Marina V. & Ahmed, Ehsan, 2000. "Income Inequality and the Informal Economy in Transition Economies," Journal of Comparative Economics, Elsevier, vol. 28(1), pages 156-171, March.
  5. Rutkowski, Jan, 2003. "Why is unemployment so high in Bulgaria?," Policy Research Working Paper Series 3017, The World Bank.
  6. World Bank, 2002. "Labor Market in Postwar Bosnia and Herzegovina : How to Encourage Businesses to Create Jobs and Increase Worker Mobility," World Bank Other Operational Studies 15333, The World Bank.
  7. World Bank, 2005. "Bosnia and Herzegovina : Country Economic Memorandum," World Bank Other Operational Studies 8676, The World Bank.
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Cited by:
  1. Lehmann, Hartmut & Razzolini, Tiziano & Zaiceva, Anzelika, 2011. "Job Separations and Informality in the Russian Labor Market," IZA Discussion Papers 6230, Institute for the Study of Labor (IZA).
  2. Quintano, Claudio & Mazzocchi, Paolo, 2013. "The shadow economy beyond European public governance," Economic Systems, Elsevier, vol. 37(4), pages 650-670.
  3. Tansel, Aysit & Kan, Elif Oznur, 2012. "Labor Mobility across the Formal/Informal Divide in Turkey: Evidence from Individual Level Data," IZA Discussion Papers 6271, Institute for the Study of Labor (IZA).
  4. Aistov, Andrey & Larin, Alexander & Leonova, Lyudmila, 2012. "Informal employment and happiness: Model with endogenous regressors," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 26(2), pages 17-36.
  5. Gorana Krstić & Peter Sanfey, 2008. "Earnings Inequality and the Informal Economy: Evidence from Serbia," wiiw Balkan Observatory Working Papers 075, The Vienna Institute for International Economic Studies, wiiw.
  6. Christoph Eder, 2013. "Displacement and Education of the Next Generation: Evidence from Bosnia and Herzegovina," HiCN Working Papers 152, Households in Conflict Network.
  7. H. Lehmann & T. Razzolini & A. Zaiceva, 2011. "Job Separations, Job Loss and Informality in the Russian Labor Market," Working Papers wp800, Dipartimento Scienze Economiche, Universita' di Bologna.
  8. Aristei, David & Perugini, Cristiano, 2012. "Inequality and reforms in transition countries," Economic Systems, Elsevier, vol. 36(1), pages 2-10.
  9. Alicia Puyana & Jose Romero, 2012. "Informalidad y dualismo en la economía mexicana," Serie documentos de trabajo del Centro de Estudios Económicos 2012-11, El Colegio de México, Centro de Estudios Económicos.
  10. Anna Lukiyanova, 2013. "Earnings inequality and informal Employment in Russia," HSE Working papers WP BRP 37/EC/2013, National Research University Higher School of Economics.
  11. Lukiyanova, Anna, 2013. "The impact of informality on earnings inequality: Unconditional quantile regressions," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 32(4), pages 3-28.

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