Informalidad y dualismo en la economía mexicana
AbstractThis paper analyzes the trajectory of informality as it has evolved since 1950. For doing so, the analytic frame elaborated by Arthur Lewis was applied. For Lewis, the informal employment results from the incapacity of an economy, with unlimited labour supply, to absorb all the working force at a given equilibrium salary. Therefore, in this essay, informality represents the residual labour that remains stacked in the non-modern sector, once the modern sector has absorbed all the labour it can employed at a given equilibrium wage and available capital. The analysis starts with a mathematical formalization of the Lewis model and proceeds to evaluate one of its main conclusions using observed data of the Mexican economy. The model accurately represents the stylized facts of the economy and allows concluding that, after the introduction of the structural reforms, the modern sector of the Mexican economy experienced a large increase in capital intensity which enlarged its capital/labour ratio and inflated the costs of generating formal employment. In these conditions, and taking into consideration the meagre investments registered during the last two decades it is not surprising the immovability of the share of formal in total employment as well as the almost negligible increases in total labour productivity and total income per head.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by El Colegio de México, Centro de Estudios Económicos in its series Serie documentos de trabajo del Centro de Estudios Económicos with number 2012-11.
Date of creation: May 2012
Date of revision:
employment; informality; dualism; productivity;
Find related papers by JEL classification:
- J0 - Labor and Demographic Economics - - General
- J4 - Labor and Demographic Economics - - Particular Labor Markets
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ihrig, Jane & Moe, Karine S., 2004. "Lurking in the shadows: the informal sector and government policy," Journal of Development Economics, Elsevier, vol. 73(2), pages 541-557, April.
- Kim, Jae-Young, 2000. "Detection of change in persistence of a linear time series," Journal of Econometrics, Elsevier, vol. 95(1), pages 97-116, March.
- Auriol, Emmanuelle & Warlters, Michael, 2004.
"Taxation Base in Developing Countries,"
IDEI Working Papers
292, Institut d'Économie Industrielle (IDEI), Toulouse.
- Gourinchas, Pierre-Olivier & Jeanne, Olivier, 2007.
"Capital Flows to Developing Countries: The Allocation Puzzle,"
CEPR Discussion Papers
6561, C.E.P.R. Discussion Papers.
- Pierre-Olivier Gourinchas & Olivier Jeanne, 2013. "Capital Flows to Developing Countries: The Allocation Puzzle," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1484-1515.
- Pierre-Olivier Gourinchas & Olivier Jeanne, 2007. "Capital Flows to Developing Countries: The Allocation Puzzle," NBER Working Papers 13602, National Bureau of Economic Research, Inc.
- Olivier Jeanne & Pierre-Olivier Gourinchas, 2005. "Capital Flows to Developing Countries: the Allocation Puzzle," 2005 Meeting Papers 240, Society for Economic Dynamics.
- Pierre-Olivier & Olivier Jeanne, 2009. "Capital Flows to Developing Countries: The Allocation Puzzle," Working Paper Series WP09-12, Peterson Institute for International Economics.
- Roxana Gutierrez-Romero, 2010. "The Dynamics of the Informal Economy," Economics Series Working Papers CSAE WPS/2010-07, University of Oxford, Department of Economics.
- Andrews, Donald W K & Ploberger, Werner, 1994.
"Optimal Tests When a Nuisance Parameter Is Present Only under the Alternative,"
Econometric Society, vol. 62(6), pages 1383-1414, November.
- Donald W.K. Andrews & Werner Ploberger, 1992. "Optimal Tests When a Nuisance Parameter Is Present Only Under the Alternative," Cowles Foundation Discussion Papers 1015, Cowles Foundation for Research in Economics, Yale University.
- Tom Doan, . "APGRADIENTTEST: RATS procedure to perform Andrews-Ploberger Structural Break Test for GARCH/Maximum Likelihood," Statistical Software Components RTS00007, Boston College Department of Economics.
- Tom Doan, . "REGHBREAK: RATS procedure to perform structural break test with bootstrapped p-values," Statistical Software Components RTS00176, Boston College Department of Economics.
- Tom Doan, . "APBREAKTEST: RATS procedure to implement Andrews-Ploberger Structural Break Test," Statistical Software Components RTS00006, Boston College Department of Economics.
- Gorana Krstic & Peter Sanfey, 2007.
"Mobility, poverty and well-being among the informally employed in Bosnia and Herzegovina,"
101, European Bank for Reconstruction and Development, Office of the Chief Economist.
- Krstic, Gorana & Sanfey, Peter, 2007. "Mobility, poverty and well-being among the informally employed in Bosnia and Herzegovina," Economic Systems, Elsevier, vol. 31(3), pages 311-335, September.
- Galli, Rossana & Kucera, David, 2004. "Labor Standards and Informal Employment in Latin America," World Development, Elsevier, vol. 32(5), pages 809-828, May.
- Inder, B. A., 1984. "Finite-sample power of tests for autocorrelation in models containing lagged dependent variables," Economics Letters, Elsevier, vol. 14(2-3), pages 179-185.
- Sargan, John Denis & Bhargava, Alok, 1983. "Testing Residuals from Least Squares Regression for Being Generated by the Gaussian Random Walk," Econometrica, Econometric Society, vol. 51(1), pages 153-74, January.
- Amaral, Pedro S. & Quintin, Erwan, 2006. "A competitive model of the informal sector," Journal of Monetary Economics, Elsevier, vol. 53(7), pages 1541-1553, October.
- Kirkpatrick, Colin & Barrientos, Armando, 2004. "The Lewis Model After Fifty Years," Development Economics and Public Policy Working Papers 30550, University of Manchester, Institute for Development Policy and Management (IDPM).
- Donald W.K. Andrews, 1990.
"Tests for Parameter Instability and Structural Change with Unknown Change Point,"
Cowles Foundation Discussion Papers
943, Cowles Foundation for Research in Economics, Yale University.
- Andrews, Donald W K, 1993. "Tests for Parameter Instability and Structural Change with Unknown Change Point," Econometrica, Econometric Society, vol. 61(4), pages 821-56, July.
- N. Gregory Mankiw & David Romer & David N. Weil, 1992.
"A Contribution to the Empirics of Economic Growth,"
NBER Working Papers
3541, National Bureau of Economic Research, Inc.
- M. Anne Hill, 1989. "Female Labor Supply in Japan: Implications of the Informal Sector for Labor Force Participation and Hours of Work," Journal of Human Resources, University of Wisconsin Press, vol. 24(1), pages 143-161.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rocío Contreras Romo).
If references are entirely missing, you can add them using this form.