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• Roberta Zizza

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Paper provided by Bank of Italy, Economic Research Department in its series Temi di discussione (Economic working papers) with number 702.

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Date of creation: Jan 2009
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Handle: RePEc:bdi:wptemi:td_702_09

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Keywords: irregular employment; underground economy; dual informal sector; occupational choice; education; school drop-out; North and South divide Abstract: The paper empirically tests the relationship between underground labour and schooling achievement for Italy; a country ranking badly in both respects when compared to other high-income economies; with a marked duality between North and South. In order to identify underground workers; we exploit the information on individualsÂ’ social security positions available from the Bank of ItalyÂ’s Survey on Household Income and Wealth. After controlling for a wide range of socio-demographic and economic variables and addressing potential endogeneity and selection issues; we show that a low level of education sizeably and significantly increases the probability of working underground. Switching from completing compulsory school to graduating at college more than halves this probability for both men and women. The gain is slightly higher for individuals completing the compulsory track with respect to those having no formal education at all. The different probabilities found for self-employed and dependent workers support the view of a dual informal sector; in which necessity and desirability coexist.;

Find related papers by JEL classification:
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
R23 - Urban, Rural, and Regional Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

This paper has been announced in the following NEP Reports:

• NEP-ALL-2009-02-14 (All new papers)
• NEP-EDU-2009-02-14 (Education)
• NEP-HRM-2009-02-14 (Human Capital & Human Resource Management)
• NEP-LAB-2009-02-14 (Labour Economics)

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This page was last updated on 2009-11-11.