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Labor Informality: Choice or Sign of Segmentation? A Quantile Regression Approach at the Regional Level for Colombia

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  • Garcia Cruz, Gustavo Adolfo

Abstract

The labor market in developing countries is remarkably heterogeneous with a small productive formal sector, enjoying high wages and attractive employment conditions and another large informal sector with low productivity and volatile wages. The informal sector is particularly diverse. In this paper we examine the heterogeneity of the informal sector at regional level in Colombia. In general, our findings suggest that, both voluntary and involuntary informal employment co-exist by choice and as a result of labor market segmentation. We also find that there are striking differences in labor market characteristics between cities, in particular in the traditional informal segment.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 55224.

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Date of creation: 01 Apr 2014
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Handle: RePEc:pra:mprapa:55224

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Keywords: Informality; local labor markets; quantile regression; selection bias; formal/informal wage gap decomposition;

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