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Revisiting the determinants of informal sector in Burkina Faso

Author

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  • Jean Abel Traoré

    (University Ouaga II, Laboratory of Economic Policy Analysis, Burkina Faso)

Abstract

The main objective of this paper is to highlight the determinants of informal sector activity with a special focus on informal self-employment opposed to informal wage employment. For this purpose we build a theoretical framework to show the important role of education in occupational choice. To empirically test our hypothesis, we estimate a two-stage degenerated nested Logit model after rejecting the independence of irrelevant alternatives hypothesis. Our results show that the probability of formal sector employment increases with the level of education. In the informal sector education attainment tends to reduce the probability of self-employment as opposed to wage employment. Other relevant determinants are related to gender, age and place of residence.

Suggested Citation

  • Jean Abel Traoré, 2013. "Revisiting the determinants of informal sector in Burkina Faso," Economic Research Guardian, Mutascu Publishing, vol. 3(2), pages 111-145, December.
    • Handle: RePEc:wei:journl:v:3:y:2013:i:2:p:111-145
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    Cited by:

    1. William Monteith & Lena Giesbert, 2017. "‘When the stomach is full we look for respect’: perceptions of ‘good work’ in the urban informal sectors of three developing countries," Work, Employment & Society, British Sociological Association, vol. 31(5), pages 816-833, October.

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    Keywords

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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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