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Is Informality a Good Measure of Job Quality? Evidence from Job Satisfaction Data

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Author Info
Carmen Pages ()
Lucia Madrigal ()

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Abstract

The formality status of a job is the most widely used indicator of job quality in developing countries. However, a number of studies argue that, at least for some workers, the informality status may be driven by choice rather than exclusion. This paper uses job satisfaction data from three low-income countries (Honduras, Guatemala and El Salvador) to assess whether informal jobs are less valued than formal jobs. The paper finds substantial differences in job satisfaction within different types of informal jobs. More importantly, the results suggest that across different definitions, informality does not yield the same ranking of job quality as self-reported measures of job satisfaction. This correspondence varies across countries, and it seems to be lower for less-skilled workers.

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Paper provided by Inter-American Development Bank, Research Department in its series RES Working Papers with number 4603.

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Date of creation: Dec 2008
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Handle: RePEc:idb:wpaper:4603

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Related research
Keywords: Job Satisfaction; Informality; Quality of Employment; Honduras; El Salvador; Guatemala.;

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Find related papers by JEL classification:
J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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  10. Carmen Pagés & Marco Stampini, 2007. "No Education, No Good Jobs? Evidence on the Relationship between Education and Labor Market Segmentation," IZA Discussion Papers 3187, Institute for the Study of Labor (IZA). [Downloadable!]
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  11. Mariano Bosch & William Maloney, 2007. "Gross Worker Flows in the Presence of Informal Labor Markets: Evidence from Mexico, 1987-2002," IZA Discussion Papers 2864, Institute for the Study of Labor (IZA). [Downloadable!]
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  13. Maloney, William F., 2004. "Informality Revisited," World Development, Elsevier, vol. 32(7), pages 1159-1178, July. [Downloadable!] (restricted)
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  14. Diego Restuccia & Richard Rogerson, 2008. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 707-720, October. [Downloadable!] (restricted)
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  15. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May. [Downloadable!] (restricted)
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