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Revisiting the determinants of informal sector in Burkina Faso

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  • Traoré, Jean Abel

Abstract

The main objective of this paper is to highlight the determinants of informal sector activity with a special focus on informal self-employment opposed to informal wage employment. For this purpose we build a theoretical framework to show the important role of education in occupational choice. To empirically test our hypothesis, we estimate a two-stage degenerated nested Logit model after rejecting the IIA hypothesis. Our results show that the probability of formal sector employment increases with the level of education. In the informal sector education attainment tends to reduce the probability of self-employment as opposed to wage employment. Other relevant determinants are related to gender, age and place of residence.

Suggested Citation

  • Traoré, Jean Abel, 2012. "Revisiting the determinants of informal sector in Burkina Faso," MPRA Paper 49006, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:49006
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    References listed on IDEAS

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    1. Jean-Philippe Karim El Aynaoui, 1997. "Participation, choix occupationnel et gains sur un marché du travail segmenté : une analyse appliquée au cas du Maroc," Documents de travail 18, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.
    2. François Bourguignon & Martin Fournier & Marc Gurgand, 2007. "Selection Bias Corrections Based On The Multinomial Logit Model: Monte Carlo Comparisons," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 174-205, February.
    3. repec:dau:papers:123456789/4584 is not listed on IDEAS
    4. Nancy Benjamin & Ahmadou Aly Mbaye, 2012. "The Informal Sector in Francophone Africa : Firm Size, Productivity, and Institutions [Les entreprises informelles de l'Afrique de l'ouest francophone : Taille, productivité et institutions]," World Bank Publications - Books, The World Bank Group, number 9364, December.
    5. François Combarnous, 1999. "La mise en oeuvre du modèle logistique multinomial emboîté dans l'analyse de la participation au marché du travail," Documents de travail 39, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.
    6. Lassassi, Moundir & Hammouda, Nacer-Eddine, 2009. "Déterminants de la participation au marché du travail et choix occupationnel: une analyse microéconométrique appliquée au cas de l'Algérie [Microeconometric analysis of determinants of occupational," MPRA Paper 31189, University Library of Munich, Germany.
    7. Denis Cogneau, 2001. "Formation du revenu, segmentation et discrimination sur le marché du travail d'une ville en développement : Antananarivo fin de siècle," Working Papers DT/2001/18, DIAL (Développement, Institutions et Mondialisation).
    8. Edvard Johansson, 2000. "Self-employment and the predicted earnings differential - evidence from Finland," Finnish Economic Papers, Finnish Economic Association, vol. 13(1), pages 45-55, Spring.
    9. Johannes Jütting & Jante Parlevliet & Theodora Xenogiani, 2008. "Informal Employment Re-loaded," OECD Development Centre Working Papers 266, OECD Publishing.
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    Cited by:

    1. William Monteith & Lena Giesbert, 2017. "‘When the stomach is full we look for respect’: perceptions of ‘good work’ in the urban informal sectors of three developing countries," Work, Employment & Society, British Sociological Association, vol. 31(5), pages 816-833, October.

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    More about this item

    Keywords

    Informal sector; Education; Nested logit;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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