Informality: Sectoral Selection and Earnings in Uruguay
AbstractIn this paper we define informal workers as those who are not contributing to the social security system. We analyse the likelihood of being informal and we estimate the differentials in earnings between sectors using both the OLS estimation and a switching regression model. We assess the premium for being formal by predicting five different proxies of the average gap. We use the crosssection data reported in a 2005 household survey. We find that formality is more likely among the better-educated, women, people residing in the capital city, heads of households and full-time workers. In addition, we find that according to the five measures of the gap, earnings are higher in the formal than in the informal sector.
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Bibliographic InfoPaper provided by Department of Economics - dECON in its series Documentos de Trabajo (working papers) with number 2007.
Length: 27 pages
Date of creation: Nov 2007
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informal sector; wage differential;
Other versions of this item:
- Marisa Bucheli & Rodrigo Ceni, 2010. "Informality Sectoral Selection and Earnings in Uruguay," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 25(2), pages 281-307.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-12-15 (All new papers)
- NEP-LAB-2007-12-15 (Labour Economics)
- NEP-LAM-2007-12-15 (Central & South America)
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