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Abstract

We examine whether the Colombian government, when instituting and expanding social programs in the early nineties, inadvertently created incentives for people to become informal. We use data from repeated cross-sections of the Colombian Household Survey for periods before and after implementation of the reforms. As robustness, we also construct a panel of individuals interviewed for the first and second Census of the Poor. Using the variation in the onset of interviews across municipalities we find robust and consistent estimates of an increase in informal employment between 2 and 4 percentage points. From a policy perspective this implies that the broad expansion of government provided health insurance in Colombia contributed to increasing informal employment.

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File URL: http://economia.uniandes.edu.co/publicaciones/dcede2009-18.pdf
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Paper provided by UNIVERSIDAD DE LOS ANDES-CEDE in its series DOCUMENTOS CEDE with number 006003.

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Length: 36
Date of creation: 02 Aug 2009
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Handle: RePEc:col:000089:006003

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1. Adriana D. Kugler, 1999. "The impact of firing costs on turnover and unemployment: Evidence from the Colombian labour market reform," Economics Working Papers 388, Department of Economics and Business, Universitat Pompeu Fabra.
   
   • Adriana Kugler, 1999. "The Impact of Firing Costs on Turnover and Unemployment: Evidence from the Colombian Labour Market Reform," International Tax and Public Finance, Springer, vol. 6(3), pages 389-410, August.
2. Maloney, William, 2003. "Informality revisited," Policy Research Working Paper Series 2965, The World Bank.
   
   • Maloney, William F., 2004. "Informality Revisited," World Development, Elsevier, vol. 32(7), pages 1159-1178, July.
3. Eduardo Lora, 2001. "Structural Reforms in Latin America: What Has Been Reformed and How to Measure It," Research Department Publications 4293, Inter-American Development Bank, Research Department.
   
   • Eduardo Lora, 2001. "Structural reforms in Latin America: What has been reformed and how to measure it?," Research Department Publications 4287, Inter-American Development Bank, Research Department.
4. Loayza, Norman V., 1996. "The economics of the informal sector: a simple model and some empirical evidence from Latin America," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 45(1), pages 129-162, December.
   
   • Loayza, Norman A., 1997. "The economics of the informal sector : a simple model and some empirical evidence from Latin America," Policy Research Working Paper Series 1727, The World Bank.
5. Adriana Camacho & Emily Conover, 2011. "Manipulation of Social Program Eligibility," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 41-65, May.

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:

1. Distorsiones del mercado laboral colombiano a causa del diseño del Sistema de Protección Social
   by Adriana Camacho González in Foco Económico on 2011-08-30 12:00:00

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Cited by:

1. Alejandro Hoyos & Hugo Ñopo & Ximena Peña, 2010. "The Persistent Gender Earnings Gap in Colombia, 1994-2006," DOCUMENTOS CEDE 007095, UNIVERSIDAD DE LOS ANDES-CEDE.
   
   • Alejandro Hoyos & Hugo Nopo & Ximena Pena, 2010. "The Persistent Gender Earnings Gap in Colombia, 1994-2006," Research Department Publications 4673, Inter-American Development Bank, Research Department.
   • Hoyos, Alejandro & Nopo, Hugo & Peña, Ximena, 2010. "The Persistent Gender Earnings Gap in Colombia, 1994-2006," IZA Discussion Papers 5073, Institute for the Study of Labor (IZA).
   • Alejandro Hoyos & Hugo Ñopo & Ximena Peña, 2010. "The Persistent Gender Earnings Gap in Colombia, 1994-2006," DOCUMENTOS CEDE 007094, UNIVERSIDAD DE LOS ANDES-CEDE.
2. Calderón-Mejía, Valentina & Marinescu, Ioana E., 2012. "The Impact of Colombia's Pension and Health Insurance Systems on Informality," IZA Discussion Papers 6439, Institute for the Study of Labor (IZA).
   
   • Valentina Calderón & Ioana Marinescu, 2011. "The Impact of Colombia's Pension and Health Insurance Systems on Informality," IDB Publications 62338, Inter-American Development Bank.
3. Carlos medina & Jairo Núñez & Jorge Andrés Tamayo, 2013. "The Unemployment Subsidy Program in Colombia: An Assessment," Borradores de Economia 750, Banco de la Republica de Colombia.
   
   • Carlos Medina & Jairo Núñez & Jorge Andrés Tamayo, 2013. "The Unemployment Subsidy Program in Colombia: An Assessment," BORRADORES DE ECONOMIA 010393, BANCO DE LA REPÚBLICA.
4. Aterido, Reyes & Hallward-Driemeier, Mary & Pagés, Carmen, 2011. "Does Expanding Health Insurance Beyond Formal-Sector Workers Encourage Informality? Measuring the Impact of Mexico's Seguro Popular," IZA Discussion Papers 5996, Institute for the Study of Labor (IZA).
   
   • Aterido, Reyes & Hallward-Driemeier, Mary & Pages, Carmen, 2011. "Does expanding health insurance beyond formal-sector workers encourage informality ? measuring the impact of Mexico's Seguro Popular," Policy Research Working Paper Series 5785, The World Bank.
5. Raquel Bernal & Adriana Camacho & Carmen Elisa Flórez & Alejandro Gaviria, 2009. "Desarrollo económico: retos y políticas públicas," DOCUMENTOS CEDE 005269, UNIVERSIDAD DE LOS ANDES-CEDE.
6. Azuara, Oliver & Marinescu, Ioana, 2011. "Informality and the expansion of social protection programs," MPRA Paper 35073, University Library of Munich, Germany.
7. Arturo Galindo & Marcela Melendez, 2010. "Corporate Tax Stimulus and Investment in Colombia," Research Department Publications 4664, Inter-American Development Bank, Research Department.
8. Angel-Urdinola, Diego F. & Haimovich, Francisco & Robayo, Monica, 2009. "Is Social Assistance Contributing to Higher Informality in Turkey?," MPRA Paper 27675, University Library of Munich, Germany.

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