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Micro-determinants of informal employment in the Middle East and North Africa region

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  • Angel-Urdinola, Diego F.
  • Tanabe, Kimie

Abstract

This note assesses the main micro?determinants of informal employment in the Middle East and North Africa (MENA) region from a human development stand point. It's main purpose is to quantify the patterns of labor informality (defined as the share of all employment with no access to social security) according to age, gender, education level, employment sector, profession, marital status, employment status, and geographic area in a selected group of countries in the region. Results indicate that the size of the public sector and the size of the agriculture sector are perhaps the main correlates of informality in the region. Countries where agricultural employment still constitutes a large share of overall employment (such as Morocco and Yemen) are associated with higher levels of overall informality. On the contrary, countries with larger public sectorsand more urbanized such as Egypt, Syria, and Lebanon, display lower levels of overall informality. The existence of a large public sector, still associated with generous benefits and better employment quality, creates an important segmentation between public and private employment in many MENA countries. Informality rates are very high among youth between ages fifteen and twenty-four. After age twenty-four, informality decreases rapidly until individuals reach prime working age (forty to forty?five years). This rapid decrease in informality rates goes hand in hand with a rapid increase in public sector employment, suggesting that informal workers enter into public sector jobs as they move from youth into adulthood. Results also indicate that the average worker in the informal sector is disadvantaged versus the average worker in the formal sector, as they are uncovered against social risks and are generally employed in low-productivity/low pay jobs.

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Bibliographic Info

Paper provided by The World Bank in its series Social Protection Discussion Papers with number 66594.

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Date of creation: 01 Jan 2012
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Handle: RePEc:wbk:hdnspu:66594

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Keywords: Labor Markets; Labor Policies; Tertiary Education; Work&Working Conditions; Labor Standards;

References

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  1. Loayza, Norman V. & Rigolini, Jamele, 2006. "Informality trends and cycles," Policy Research Working Paper Series, The World Bank 4078, The World Bank.
  2. R. Hirschowitz, 1989. "The Other Path: The Invisible Revolution in the Third World," South African Journal of Economics, Economic Society of South Africa, Economic Society of South Africa, vol. 57(4), pages 266-272, December.
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Cited by:
  1. Robalino, David & Margolis, David & Rother, Friederike & Newhouse, David & Lundberg, Mattias, 2013. "Youth employment : a human development agenda for the next decade," Social Protection Discussion Papers, The World Bank 83925, The World Bank.
  2. Filali Adib, Fatima-Zohra & Driouchi, Ahmed & Achehboune, Amale, 2013. "Education Attainment, Further Female Participation & Feminization of Labor Markets in Arab Countries," MPRA Paper 48516, University Library of Munich, Germany.
  3. Umapathi, Nithin & Wang, Dewen & O'Keefe, Philip, 2013. "Eligibility thresholds for minimum living guarantee programs : international practices and implications for China," Social Protection Discussion Papers, The World Bank 83118, The World Bank.
  4. Arias, Javier & Artuc, Erhan & Lederman, Daniel & Rojas, Diego, 2013. "Trade, informal employment and labor adjustment costs," Policy Research Working Paper Series, The World Bank 6614, The World Bank.
  5. Dorfman, Mark & Palacios, Robert, 2012. "World Bank support for pensions and social security," Social Protection Discussion Papers, The World Bank 70925, The World Bank.

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