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Mobility, poverty and well-being among the informally employed in Bosnia and Herzegovina

  • Gorana Krstic

    (Economics Institute, Belgrade)

  • Peter Sanfey

    ()

    (European Bank for Reconstruction and Development)

We analyse informal-sector employment in Bosnia and Herzegovina (BH), using panel data from the Living Standards Measurement Studies. We derive four main conclusions. First, there is significant labour market mobility in BH, with education being an important factor in explaining movements from informal- to formal-sector jobs. Secondly, those in informal jobs are much more likely to suffer from poverty than formally employed people. Thirdly, earnings inequality is more pronounced in the informal sector than elsewhere. Fourthly, the informally employed report lower levels of life satisfaction compared with those in almost all other groups in the labour market. Overall, we conclude that, while the informal sector may represent a vital coping strategy for many, the formal sector provides much better prospects for prosperity and well-being.

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Paper provided by European Bank for Reconstruction and Development, Office of the Chief Economist in its series Working Papers with number 101.

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Length: 27 pages
Date of creation: Jan 2007
Date of revision:
Publication status: Published in G. Krstic and P. Sanfey (2007), Economic Systems, 31(3), pp. 311-335.
Handle: RePEc:ebd:wpaper:101
Contact details of provider: Postal: One Exchange Square, London EC2A 2JN
Web page: http://www.ebrd.com/pages/research/publications/workingpapers.shtml
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  1. Rutkowski, Jan, 2003. "Why is unemployment so high in Bulgaria?," Policy Research Working Paper Series 3017, The World Bank.
  2. Peter Sanfey & Utku Teksoz, 2005. "Does transition make you happy?," Working Papers 91, European Bank for Reconstruction and Development, Office of the Chief Economist.
  3. Rosser, J. Jr. & Rosser, Marina V. & Ahmed, Ehsan, 2000. "Income Inequality and the Informal Economy in Transition Economies," Journal of Comparative Economics, Elsevier, vol. 28(1), pages 156-171, March.
  4. Edward Christie & Mario Holzner, 2004. "Household Tax Compliance and the Shadow Economy in Central and Southeastern Europe," wiiw Balkan Observatory Working Papers 38, The Vienna Institute for International Economic Studies, wiiw.
  5. Rutkowski, Jan, 2003. "Rapid labor reallocation with a stagnant unemployment pool : the puzzle of the labor market in Lithuania," Policy Research Working Paper Series 2946, The World Bank.
  6. World Bank, 2002. "Labor Market in Postwar Bosnia and Herzegovina : How to Encourage Businesses to Create Jobs and Increase Worker Mobility," World Bank Other Operational Studies 15333, The World Bank.
  7. World Bank, 2005. "Bosnia and Herzegovina : Country Economic Memorandum," World Bank Other Operational Studies 8676, The World Bank.
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