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Informal work along the business cycle: Evidence from Argentina

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  • Julien Albertini

    (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)

  • Thepthida Sopraseuth

    (UCP - Université de Cergy Pontoise - Université Paris-Seine)

  • Arthur Poirier

    (Ministerio de Producción y Trabajo)

Abstract

We shed light on the driving forces behind unemployment uctuations and short-run changes in the informality rate on the Argentine labor market. Using Argentine survey data, we measure worker ows between formal employment, informal employment, unemployment and non-participation. We propose a methodology to correct for the discontinuity of Argentine survey data and that is able to compute consistent time series of quarterly ins and outs of informal work. Using variance decompositions and counterfactual exercises, we show that the ins and outs of informal employment are key drivers of labor market uctuations. In particular, out ows from unemployment to informal employment account for 37% of uctuations in the unemployment rate. In addition, our analysis suggests that informality is: (i) a exible sector that is used in recessionary periods as a bu er against income losses and (ii) a stepping stone towards formal employment. The observed large changes in the informality rate are well explained by the change in job mobility between the formal and informal sectors as well as variations in hirings from unemployment and non-participation in the informal sector.
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Suggested Citation

  • Julien Albertini & Thepthida Sopraseuth & Arthur Poirier, 2019. "Informal work along the business cycle: Evidence from Argentina," Post-Print halshs-02503451, HAL.
  • Handle: RePEc:hal:journl:halshs-02503451
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02503451
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    Cited by:

    1. Abiodun O. Folawewo & Olusegun A. Orija, 2020. "Informal-formal workers' transition in Nigeria: A livelihood analysis," WIDER Working Paper Series wp-2020-146, World Institute for Development Economic Research (UNU-WIDER).
    2. Sébastien CARRERE & Matthieu CLEMENT & François COMBARNOUS & Gabriel KESSLER & Eric ROUGIER & Ariel WILKIS, 2022. "The middle class in Argentina: dynamics, characteristics and implications for public policies," Working Paper 83de5468-cd86-4702-a4a8-6, Agence française de développement.
    3. Julien Albertini & Arthur Poirier & Danilo R. Trupkin, 2019. "A Job Vacancy Rate for Argentina," Working Papers 1919, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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