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Is Informal Sector Work an Alternative to Workfare Benefits? The Case of Pre-Program Expansion and Economic Crisis

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  • Khamis, Melanie

    () (Wesleyan University)

Abstract

Limited availability of workfare programs and unemployment insurance and a large informal sector are features of the Argentine labor market at the outset of the 2001 economic crisis. This paper tests the hypothesis whether informal work is an alternative to workfare participation before a large-scale program expansion took place. Results from the propensity score matching indicate that observable characteristics of informal low-income workers and current workfare participants are significantly different. However, within these groups, it is possible to identify subgroups that exhibit similar observable characteristics. This indicates that only a subset of the individuals sees workfare and informal sector work as substitutable alternatives.

Suggested Citation

  • Khamis, Melanie, 2009. "Is Informal Sector Work an Alternative to Workfare Benefits? The Case of Pre-Program Expansion and Economic Crisis," IZA Discussion Papers 4614, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4614
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    Cited by:

    1. Ayça AKARÇAY-GÜRBÜZ & Mustafa ULUS, 2011. "Labor Force Status And Income Disparity - Evidence From Turkey," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, pages 39-56.

    More about this item

    Keywords

    workfare program; informal labor market; Argentina; South America; propensity score matching;

    JEL classification:

    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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