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The Function Of The Urban Informal Sector In Employment

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  • Carmen Elisa Flórez

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    Abstract

    The aim of this paper is to analyze the function of the informal sector in employment, its relationship to urban employment, with illustrative evidence from Colombia. The analysis is done for the period 1984 - 2000, which includes phases of boom and economic crisis as well as the implementation of neoliberal reforms to national development. The paper summarizes four competingapproaches to the conceptualization of the informal sector, and describes their measurement strategies. It argues that elements of state regulation are fundamental whereas firm size should not be considered as a defining element. Subsequently, it analyzes how the internal composition of the informal sector evolved, considering elements of state regulation, firm size, and dynamism ofthe economic activities. It examines the function of the informal sub-sectors in the urban labor market, using indicators such as relative earnings and size, and a crude indicator of labor mobility. At least three sub-sectors conforming theinformal sector are identified: salaried workers of large and small firms, entrepreneurs and subsistence workers. It is argued that each sub-sector of the informal sector responds in different ways to prevailing economic conditions. The subsistence sub-sector supports the dualistic view, whereas the other twoare integrated to the formal sector. No dominant sub-sector permits broadrange generalizations about the" informal sector."

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    File URL: http://economia.uniandes.edu.co/publicaciones/D2002-04.pdf
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    Bibliographic Info

    Paper provided by UNIVERSIDAD DE LOS ANDES-CEDE in its series DOCUMENTOS CEDE with number 006883.

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    Length: 60
    Date of creation: 31 Mar 2002
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    Handle: RePEc:col:000089:006883

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    Keywords: Informalidad; empleo.;

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    1. Maloney, William, 2003. "Informality revisited," Policy Research Working Paper Series 2965, The World Bank.
    2. William F. Maloney & Jairo Nunez Mendez, 2003. "Measuring the Impact of Minimum Wages: Evidence from Latin America," NBER Working Papers 9800, National Bureau of Economic Research, Inc.
    3. Fajnzylber, Pablo & Maloney, William F. & Ribeiro, Eduardo, 2001. "Firm entry and exit, labor demand, and trade reform : evidence from Chile and Colombia," Policy Research Working Paper Series 2659, The World Bank.
    4. Eduardo Lora & Carmen Pagés-Serra, 1997. "La legislación laboral en el proceso de reformas estructurales de América Latina y el Caribe," IDB Publications 7625, Inter-American Development Bank.
    5. Maloney, William F, 1999. "Does Informality Imply Segmentation in Urban Labor Markets? Evidence from Sectoral Transitions in Mexico," World Bank Economic Review, World Bank Group, vol. 13(2), pages 275-302, May.
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    Cited by:
    1. Andrea P. Velásquez Guijo, 2008. "The formality in property rights: determinant in the military strategy of armed actors," HiCN Working Papers 39, Households in Conflict Network.
    2. Guataquí R., Juan Carlos & García S., Andrés Felipe & Rodríguez A., Mauricio, 2010. "El Perfil de la Informalidad Laboral en Colombia," PERFIL DE COYUNTURA ECONÓMICA, UNIVERSIDAD DE ANTIOQUIA - CIE.
    3. Paola Roldán Vásquez & Carlos Ospino Hernández, 2009. "¿Quiénes terminan en la informalidad?: Impacto de las características y el tiempo de búsqueda," REVISTA DE ECONOMÍA DEL CARIBE, UNIVERSIDAD DEL NORTE.
    4. José Ignacio Uribe & Carlos Humberto Ortiz & Gustavo Adolfo García, 2007. "La segmentación del mercado laboral colombiano en la década de los noventa," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 9(16), pages 189-221, January-J.
    5. Lacey Ann Wrubel, 2010. "Earnings determinants for own-account workers in the urban informal economy: The case of Bogotá, Colombia," SERIE DE DOCUMENTOS EN ECONOMÍA Y VIOLENCIA 006842, CENTRO DE INVESTIGACIONES EN VIOLENCIA, INSTITUCIONES Y DESARROLLO ECONÓMICO (VIDE).

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