Informal Employment Relationships and Labor Market Segmentation in Transition Economies: Evidence from Ukraine
Research on informal employment in transition countries has been very limited because of a lack of appropriate data. A new rich panel data set from Ukraine, the Ukrainian Longitudinal Monitoring Survey (ULMS), enables us to provide some empirical evidence on informal employment in Ukraine and the validity of the three schools of thought in the literature on the role of informality in the development process. Apart from providing additional evidence with richer data than usually available in developing countries, the paper investigates to what extent the informal sector plays a role in labor market adjustment in a transition economy. The evidence points to some labor market segmentation since the majority of informal salaried employees are involuntarily employed and workers seem to queue for formal salaried jobs. We also show that the dependent informal sector is segmented into a voluntary “upper tier” and an involuntary lower part where the majority of informal jobs are located. Our contention that informal self-employment is voluntary is confirmed by the substantial earnings premia associated with movements into this state.
|Date of creation:||Dec 2007|
|Contact details of provider:|| Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany|
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fields, Gary S., 2007. "Labor market policy in developing countries : a selective review of the literature and needs for the future," Policy Research Working Paper Series 4362, The World Bank.
- Eliane El Badaoui & Eric Strobl & Frank Walsh, 2008.
"Is There an Informal Employment Wage Penalty? Evidence from South Africa,"
Economic Development and Cultural Change,
University of Chicago Press, vol. 56, pages 683-710.
- El Badaoui, Eliane & Strobl, Eric & Walsh, Frank, 2007. "Is There an Informal Employment Wage Penalty? Evidence from South Africa," IZA Discussion Papers 3151, Institute for the Study of Labor (IZA).
- Frank Walsh & Eliane Badaoui & Eric Strobl, 2008. "Is there an informal employment wage penalty? Evidence from South Africa," Open Access publications 10197/182, School of Economics, University College Dublin.
- Manski, C.F., 1992. "Identification Problems in the Social Sciences," Working papers 9217, Wisconsin Madison - Social Systems.
- Heckman, James J & Honore, Bo E, 1990. "The Empirical Content of the Roy Model," Econometrica, Econometric Society, vol. 58(5), pages 1121-1149, September.
- Lehmann, Hartmut & Wadsworth, Jonathan, 2000.
"Tenures That Shook the World: Worker Turnover in Russia, Poland, and Britain,"
Journal of Comparative Economics,
Elsevier, vol. 28(4), pages 639-664, December.
- Lehmann, Hartmut & Wadsworth, Jonathan, 1999. "Tenures that Shook the World: Worker Turnover in Russia, Poland and Britain," IZA Discussion Papers 90, Institute for the Study of Labor (IZA).
- Hartmut Lehmann & Jonathan Wadsworth, 1999. "Tenures that Shook the World: Worker Turnover in Russia, Poland and Britain," CERT Discussion Papers 9909, Centre for Economic Reform and Transformation, Heriot Watt University.
- Hartmut Lehmann & Jonathan Wadsworth, 1999. "Tenures that Shook the World: Worker Turnover in Russia, Poland and Britain," William Davidson Institute Working Papers Series 160, William Davidson Institute at the University of Michigan.
- Hartmut Lehmann & Jonathan Wadsworth, 2000. "Tenures that shook the world: Worker Turnover in Russia, Poland and Britain," LICOS Discussion Papers 9500, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
- H Lehmann & Jonathan Wadsworth, 2000. "Tenures that Shook the World: Worker Turnover in Russia, Poland and Britain," CEP Discussion Papers dp0459, Centre for Economic Performance, LSE.
- Lehmann, Hartmut & Wadsworth, Jonathan, 2000. "Tenures that shook the world: worker turnover in Russia, Poland and Britain," LSE Research Online Documents on Economics 20186, London School of Economics and Political Science, LSE Library.
- Bosch, Mariano & Maloney, William, 2005. "Labor market dynamics in developing countries: comparative analysis using continuous time Markov processes," Policy Research Working Paper Series 3583, The World Bank.
- Tito Boeri & Katherine Terrell, 2002.
"Institutional Determinants of Labor Reallocation in Transition,"
Journal of Economic Perspectives,
American Economic Association, vol. 16(1), pages 51-76, Winter.
- Tito Boeri & Katherine Terrell, 2001. "Institutional Determinants of Labor Reallocation in Transition," William Davidson Institute Working Papers Series 384, William Davidson Institute at the University of Michigan.
- Funkhouser, Edward, 1997. "Mobility and Labor Market Segmentation: The Urban Labor Market in El Salvador," Economic Development and Cultural Change, University of Chicago Press, vol. 46(1), pages 123-153, October.
- Schneider, Friedrich, 2004. "The Size of the Shadow Economies of 145 Countries all over the World: First Results over the Period 1999 to 2003," IZA Discussion Papers 1431, Institute for the Study of Labor (IZA).
- Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-512, March.
- Chandra, Vandana & Khan, M Ali, 1993. "Foreign Investment in the Presence of an Informal Sector," Economica, London School of Economics and Political Science, vol. 60(237), pages 79-103, February.
- Jarque, Carlos M. & Bera, Anil K., 1980. "Efficient tests for normality, homoscedasticity and serial independence of regression residuals," Economics Letters, Elsevier, vol. 6(3), pages 255-259.
- Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
- Maloney, William F, 1999. "Does Informality Imply Segmentation in Urban Labor Markets? Evidence from Sectoral Transitions in Mexico," World Bank Economic Review, World Bank Group, vol. 13(2), pages 275-302, May. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp3269. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.