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Indirect Job Creation and the Informal Sector in Mexico

Listed author(s):
  • Mariana Pereira-López

    (Postdoctoral Fellow Universidad Iberoamericana)

This paper analyzes the effects of localized labor demand shocks in the tradable sector, such as the establishment of a large tradable firm in a municipality, over nontradable formal and informal jobs in the case of Mexico. Results indicate that locations that experienced this shock have between 8 and 13 thousand more jobs than other municipalities over a ten--year period. Indirect job creation is similar in both the formal and the informal sectors, but informality appears to be more vulnerable to negative shocks. Furthermore, the effects of shocks are symmetric in the formal sector but not in the informal, where negative shocks have greater effects over nontradable employment.

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File URL: http://cedlas.econo.unlp.edu.ar/archivos_upload/doc_cedlas153.pdf
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Paper provided by CEDLAS, Universidad Nacional de La Plata in its series CEDLAS, Working Papers with number 0153.

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Length: 27 pages
Date of creation: Jan 2014
Handle: RePEc:dls:wpaper:0153
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Web page: http://cedlas.econo.unlp.edu.ar/

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  1. Maloney, William F., 2004. "Informality Revisited," World Development, Elsevier, vol. 32(7), pages 1159-1178, July.
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  12. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, June.
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  16. Gerardo Esquivel Hernández & Juan Luis Ordaz-Díaz, 2008. "¿Es la política social una causa de la informalidad en México?," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 1-32, May.
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