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Effects of Colombia's social protection system on workers'choice between formal and informal employment

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  • Camacho, Adriana
  • Conover, Emily
  • Hoyos, Alejandro

Abstract

This paper examines whether the Colombian government's expansion of social programs in the early 1990s, particularly the publicly provided health insurance, discouraged formal employment. Using household survey data and variation across municipalities in the onset of interviews for the SISBEN, the instrument used to identify beneficiaries for public health insurance, it shows robust and consistent estimates of an increase in informal employment of approximately 4 percentage points. Similar results are obtained using an alternative dataset, consisting of a panel of individuals interviewed for the first and second SISBEN. The findings suggest that marginal individuals optimized when deciding whether to participate in the formal sector.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6564.

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Date of creation: 01 Aug 2013
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Handle: RePEc:wbk:wbrwps:6564

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Keywords: Health Monitoring&Evaluation; Labor Markets; Health Systems Development&Reform; Labor Policies; Population Policies;

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References

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  1. Sebastian Galiani & Federico Weinschelbaum, 2007. "Modeling Informality Formally: Households and Firms," CEDLAS, Working Papers 0047, CEDLAS, Universidad Nacional de La Plata.
  2. Aterido, Reyes & Hallward-Driemeier, Mary & Pages, Carmen, 2011. "Does expanding health insurance beyond formal-sector workers encourage informality ? measuring the impact of Mexico's Seguro Popular," Policy Research Working Paper Series 5785, The World Bank.
  3. Azuara, Oliver & Marinescu, Ioana, 2011. "Informality and the expansion of social protection programs," MPRA Paper 35073, University Library of Munich, Germany.
  4. Mariano Bosch & Raymundo M. Campos-Vázquez, 2010. "The trade-offs of social assistance programs in the labor market: The case of the “Seguro Popular” program in Mexico," Serie documentos de trabajo del Centro de Estudios Económicos 2010-12, El Colegio de México, Centro de Estudios Económicos.
  5. Mauricio Cardenas & Raquel Bernal, 2003. "Determinants of Labor Demand in Colombia: 1976-1996," NBER Working Papers 10077, National Bureau of Economic Research, Inc.
  6. Leonardo Gasparini & Francisco Haimovich & Sergio Olivieri, 2007. "Labor Informality Effects of a Poverty-Alleviation Program," CEDLAS, Working Papers 0053, CEDLAS, Universidad Nacional de La Plata.
  7. Leonardo Gasparini & Francisco Haimovich & Sergio Olivieri, 2009. "Labor informality bias of a poverty-alleviation program in Argentina," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 181-205, November.
  8. Adriana Kugler, 1999. "The Impact of Firing Costs on Turnover and Unemployment: Evidence from the Colombian Labour Market Reform," International Tax and Public Finance, Springer, vol. 6(3), pages 389-410, August.
  9. Valentina Calderón & Ioana Marinescu, 2011. "The Impact of Colombia's Pension and Health Insurance Systems on Informality," IDB Publications 62338, Inter-American Development Bank.
  10. Raymundo M. Campos-Vázquez & Melissa A. Knox, 2013. "Social Protection Programs and Employment: The Case of Mexico's Seguro Popular Program," Economia Mexicana NUEVA EPOCA, , vol. 0(2), pages 403-448, July-Dece.
  11. Adriana Camacho & Emily Conover, 2011. "Manipulation of Social Program Eligibility," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 41-65, May.
  12. Guillermo E. Perry & William F. Maloney & Omar S. Arias & Pablo Fajnzylber & Andrew D. Mason & Jaime Saavedra-Chanduvi, 2007. "Informality : Exit and Exclusion," World Bank Publications, The World Bank, number 6730, October.
  13. Lucas Ronconi, 2010. "Enforcement and Compliance with Labor Regulations," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 63(4), pages 719-736, July.
  14. Marcelo Bérgolo & Guillermo Cruces, 2011. "Labor Informality and the Incentive Effects of Social Security: Evidence from a Health Reform in Uruguay," IDB Publications 62318, Inter-American Development Bank.
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  1. Distorsiones del mercado laboral colombiano a causa del diseño del Sistema de Protección Social
    by Adriana Camacho González in Foco Económico on 2011-08-30 12:00:00
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