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Earnings determinants for own-account workers in the urban informal economy: The case of Bogotá, Colombia

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  • Lacey Ann Wrubel

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    Abstract

    This paper explores earnings determinants for own-account workers in the urban informal economy of Bogotá, Colombia. Descriptive statistics show differences in individual, household and business characteristics when gender and business location are compared. Own-account workers operating in the street, on average, earn less than those in other locations and are the most dissatisfied with their jobs. For all regressions, the dependent variable is the log of hourly earnings. Under the human capital earnings model, women earn statistically significantly less than men for every hour worked. Using an earnings model that includes human, market and social capital factors, there is no gender gap. Education and being married have statistically significant positive returns for men and women. When the data are segmented by gender, age (as a proxy for experience) has no effect on men´s hourly earnings. For women, age and the length of time in business have a statistically significant positive effect on earnings. The number of household members has a significantly negative effect on women´s hourly earnings, but does not affect men´s earnings. Results also show that women in the service sector and men in the sales sector earn significantly less compared to all other sectors.

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    Bibliographic Info

    Paper provided by CENTRO DE INVESTIGACIONES EN VIOLENCIA, INSTITUCIONES Y DESARROLLO ECONÓMICO (VIDE) in its series SERIE DE DOCUMENTOS EN ECONOMÍA Y VIOLENCIA with number 006842.

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    Length: 53
    Date of creation: 23 Mar 2010
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    Handle: RePEc:col:000137:006842

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    Keywords: Informality; Gender; Self-employment;

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    1. Maloney, William F., 2004. "Informality Revisited," World Development, Elsevier, vol. 32(7), pages 1159-1178, July.
    2. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    3. Carmen Elisa Flórez, 2002. "THE FUNCTION OF THE URBAN INFORMAL SECTOR IN EMPLOYMENT: Evidence from Colombia 1984-2000," DOCUMENTOS CEDE 003595, UNIVERSIDAD DE LOS ANDES-CEDE.
    4. Honig, Benson, 1998. "What determines success? examining the human, financial, and social capital of jamaican microentrepreneurs," Journal of Business Venturing, Elsevier, vol. 13(5), pages 371-394, September.
    5. Gronau, Reuben, 1988. "Sex-Related Wage Differentials and Women's Interrupted Labor Careers--The Chicken or the Egg," Journal of Labor Economics, University of Chicago Press, vol. 6(3), pages 277-301, July.
    6. Edgar L. Feige, 2004. "How Big IS the Irregular Economy?," Macroeconomics 0404005, EconWPA.
    7. Rocío Ribero, 2003. "Gender Dimensions Of Non-Formal Employment In Colombia," DOCUMENTOS CEDE 002762, UNIVERSIDAD DE LOS ANDES-CEDE.
    8. Klarita G�rxhani, 2004. "The Informal Sector in Developed and Less Developed Countries: A Literature Survey," Public Choice, Springer, vol. 120(3_4), pages 267-300, 09.
    9. Kurt Annen, 2005. "Economic Returns to Social Capital in the Urban Informal Sector in Developing Countries: Micro Evidence from Small Textile Producers in Bolivia," Development and Comp Systems 0511011, EconWPA.
    10. Schultz, Theodore W, 1980. "Nobel Lecture: The Economics of Being Poor," Journal of Political Economy, University of Chicago Press, vol. 88(4), pages 639-51, August.
    11. Carmen Elisa Flórez, 2002. "The Function Of The Urban Informal Sector In Employment," DOCUMENTOS CEDE 006883, UNIVERSIDAD DE LOS ANDES-CEDE.
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