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Labor Informality in Latin America and the Caribbean: Patterns and Trends from Household Survey Microdata

  • Gasparini Leonardo


  • Leonardo Tornaroli

This paper documents the main patterns and trends of alternative definitions of labor informality in Latin America and the Caribbean, by exploiting a large database of more than 100 household surveys covering the period 1989-2005. The evidence suggests that there are no signs of a consistent pattern of reduction in labor informality in the region. Regardless of the definition used, labor informality remains a pervasive characteristic of labor markets in LAC. In several countries the increase in labor informality seems to have been associated more to a sizeable increase in the propensity to set informal arrangements within groups, than to changes in the national employment structure toward more informal sectors.

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Volume (Year): (2009)
Issue (Month): (September)

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Handle: RePEc:col:000090:005860
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  1. Maloney, William F, 1999. "Does Informality Imply Segmentation in Urban Labor Markets? Evidence from Sectoral Transitions in Mexico," World Bank Economic Review, World Bank Group, vol. 13(2), pages 275-302, May.
  2. Portes, Alejandro & Blitzer, Silvia & Curtis, John, 1986. "The urban informal sector in Uruguay: Its internal structure, characteristics, and effects," World Development, Elsevier, vol. 14(6), pages 727-741, June.
  3. Friedrich Schneider & Dominik Enste, 1999. "Shadow Economies Around the World - Size, Causes, and Consequences," CESifo Working Paper Series 196, CESifo Group Munich.
  4. Maloney, William F., 2004. "Informality Revisited," World Development, Elsevier, vol. 32(7), pages 1159-1178, July.
  5. Heckman, James J. & Lochner, Lance John & Todd, Petra E., 2003. "Fifty Years of Mincer Earnings Regressions," IZA Discussion Papers 775, Institute for the Study of Labor (IZA).
  6. Pradhan, Menno & van Soest, Arthur, 1995. "Formal and informal sector employment in urban areas of Bolivia," Labour Economics, Elsevier, vol. 2(3), pages 275-297, September.
  7. Jaime Saavedra & Alberto Chong, 1999. "Structural reform, institutions and earnings: Evidence from the formal and informal sectors in urban Peru," Journal of Development Studies, Taylor & Francis Journals, vol. 35(4), pages 95-116.
  8. Guha-Khasnobis, Basudeb & Kanbur, Ravi & Ostrom, Elinor, 2006. "Beyond Formality and Informality," Working Papers 127038, Cornell University, Department of Applied Economics and Management.
  9. Leonardo Gasparini & Leopoldo Tornarolli, 2007. "Labor Informality in Latin America and the Caribbean: Patterns and Trends from Household Survey Microdata," CEDLAS, Working Papers 0046, CEDLAS, Universidad Nacional de La Plata.
  10. Leonardo Gasparini, 2001. "Microeconometric decompositions of aggregate variables. An application to labor informality in Argentina," Working Papers 68, FIEL.
  11. Fugazza, Marco & Fiess, Norbert M. & Maloney, William, 2002. "Exchange rate appreciations, labor market rigidities, and informality," Policy Research Working Paper Series 2771, The World Bank.
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