Persistence of informality in a developing country
AbstractInformality is a common phenomenon in developing countries and an unusual one in industrialized countries. The persistence of informal employment is indicative of the impossibility of moving out of this status for a certain period of time. Using pseudo panel data, empirical evidence is presented to show that this phenomenon occurs in a developing country like Colombia where education helps mitigate said persistent occurrence. The authors also present evidence that a minimum salary increase does not only result in increased informality, but also increases the persistence of informality. This kind of evidence can be used for discussing the persistence of informality in other developing countries.
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Bibliographic InfoPaper provided by UNIVERSIDAD ICESI in its series BORRADORES DE ECONOMÍA Y FINANZAS with number 009593.
Date of creation: 29 Feb 2012
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Dynamic Informality; Pseudo Panel; Probit Models;
Find related papers by JEL classification:
- C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
- J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-15 (All new papers)
- NEP-IUE-2012-05-15 (Informal & Underground Economics)
- NEP-LAB-2012-05-15 (Labour Economics)
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