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Participation and Sector Selection in Nicaragua

Author

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  • Pozzoli, Dario

    () (Department of Economics, Aarhus School of Business)

  • Ranzani, Marco

    () (Universita’ Cattolica)

Abstract

This paper investigates the structure of the labor market in Nicaragua and is aimed at understanding the determinants of the choice between a number of segments, namely inactivity, unemployment, agriculture, formal and informal sector. In addition, a model with a separate participation equation is estimated: it allows understanding that age is mainly a supply side factor, while education is an important element determining employers’ choice. Information networks, captured by the presence of a household member working in the formal sector, and geographical barriers to mobility also play a leading role.

Suggested Citation

  • Pozzoli, Dario & Ranzani, Marco, 2009. "Participation and Sector Selection in Nicaragua," Working Papers 09-8, University of Aarhus, Aarhus School of Business, Department of Economics.
  • Handle: RePEc:hhs:aareco:2009_008
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    References listed on IDEAS

    as
    1. Hausman, Jerry A & Wise, David A, 1978. "A Conditional Probit Model for Qualitative Choice: Discrete Decisions Recognizing Interdependence and Heterogeneous Preferences," Econometrica, Econometric Society, vol. 46(2), pages 403-426, March.
    2. Michael J. Pisani & José A. Pagán, 2004. "Sectoral Selection and Informality: a Nicaraguan Case Study," Review of Development Economics, Wiley Blackwell, vol. 8(4), pages 541-556, November.
    3. Piore, Michael J, 1983. "Labor Market Segmentation: To What Paradigm Does It Belong?," American Economic Review, American Economic Association, vol. 73(2), pages 249-253, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Segmentation; Multisector labor markets; Nicaragua;

    JEL classification:

    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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