“Informality and Overeducation in the Labor Market of a Developing Country”
AbstractIn this paper, we explore the connection between labor market segmentation in two sectors, a modern protected formal sector and a traditional- unprotected-informal sector, and overeducation in a developing country. Informality is thought to have negative consequences, primarily through poorer working conditions, lack of social security, as well as low levels of productivity throughout the economy. This paper considers an aspect that has not been previously addressed, namely the fact that informality might also affect the way workers match their actual education with that required performing their job. We use micro-data from Colombia to test the relationship between overeducation and informality. Empirical results suggest that, once the endogeneity of employment choice has been accounted for, formal male workers are less likely to be overeducated. Interestingly, the propensity of being overeducated among women does not seem to be closely related to the sector choice.
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Bibliographic InfoPaper provided by University of Barcelona, Regional Quantitative Analysis Group in its series AQR Working Papers with number 201303.
Length: 34 pages
Date of creation: Apr 2013
Date of revision: Apr 2013
Segmented labor markets; Formal/Informal employment; Human capital; Economic development. JEL classification: O15; J21; J24.;
Other versions of this item:
- Paula Herrera-Idárraga & Enrique López-Bazo & Elisabet Motellón, 2012. "Informality and overeducation in the labor market of a developing country," Working Papers XREAP2012-20, Xarxa de Referència en Economia Aplicada (XREAP), revised Nov 2012.
- Paula Herrera-Idárraga & Enrique López-Bazo & Elisabet Motellón, 2013. "Informality and Overeducation in the Labor Market of a Developing Country," VNIVERSITAS ECONÃMICA 010675, UNIVERSIDAD JAVERIANA - BOGOTÁ.
- Paula Herrera & Enrique López-Bazo & Elisabet Motellón, 2013. "“Informality and Overeducation in the Labor Market of a Developing Country”," IREA Working Papers 201305, University of Barcelona, Research Institute of Applied Economics, revised Apr 2013.
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-20 (All new papers)
- NEP-DEV-2013-04-20 (Development)
- NEP-IUE-2013-04-20 (Informal & Underground Economics)
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