Advanced Search
MyIDEAS: Login to save this article or follow this journal

The underground economy in Spain: an alternative to unemployment?

Contents:

Author Info

  • Namkee Ahn
  • Sara La De Rica
Registered author(s):

    Abstract

    This paper analyses the factors which determine whether an individual works in the formal sector, in the informal sector, or remains unemployed in the Spanish labour market. We highlight the implications of high unemployment on an individual's decision to work in the underground economy. We postulate that an individual decides (or is chosen) whether to work in the formal sector or not in a first stage and, if not, in a second stage decides whether to work in the underground sector or to remain unemployed. We estimate a bivariate probit model which controls for selectivity bias in the second stage. The result indicates on the one hand, that heads of household, who benefit more from social security provisions obtained in formal sector jobs, are more likely to work in such sector than others. Besides, demand restrictions seem to operate as well-individuals with higher education have easier access to the formal sector. On the other hand, among those who do not work in the formal sector, the probability of working in the informal sector relative to being unemployed is higher among those whose head of household works. For females, the probability of staying unemployed (relative to working in the informal sector) increases with education, suggesting that highly educated women prefer to search for a formal sector job rather than to work in the underground economy. We also examine the job search behaviour among the informal sector workers.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.tandfonline.com/doi/abs/10.1080/000368497326660
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 29 (1997)
    Issue (Month): 6 ()
    Pages: 733-743

    as in new window
    Handle: RePEc:taf:applec:v:29:y:1997:i:6:p:733-743

    Contact details of provider:
    Web page: http://www.tandfonline.com/RAEC20

    Order Information:
    Web: http://www.tandfonline.com/pricing/journal/RAEC20

    Related research

    Keywords:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:29:y:1997:i:6:p:733-743. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.