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The Characteristics of the Informal Sector in Timor-Leste




This study analyzes the characteristics of people working in the informal sector in Timor-Leste. We use primary data, collected from the field between January and early May 2017. A stratified random sample was used to draw a sample of 349 households, with a total of 658 adult respondents, from 38 Census Enumeration Areas in Dili and surrounding districts. A logistic regression model was used to identify the factors associated with informal sector participation. The analysis shows that 65.8 percent (n = 405) of individuals in our sample were engaged in the informal sector, including a significantly higher proportion of women than men. Education was significantly lower among those employed in the informal sector than those not employed in the informal sector. Married people were more likely to engage in the informal sector, while having no education and living in an urban area were marginally significant. Gender disaggregation shows that the impact of no education and urban area are only statistically significant for women. Moreover, analysis of economic activities performed in the informal sector actors revealed a gender dimension in the specific informal sector activities that participants were involved in. Women play a major role in food and beverage retail, as well as weaving and plaiting activities. Males dominate in occupations such as construction and quarrying activities.

Suggested Citation

  • Helio Mau-Quei & Michael P. Cameron, 2019. "The Characteristics of the Informal Sector in Timor-Leste," Working Papers in Economics 19/05, University of Waikato.
  • Handle: RePEc:wai:econwp:19/05

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    References listed on IDEAS

    1. Maloney, William F., 2004. "Informality Revisited," World Development, Elsevier, vol. 32(7), pages 1159-1178, July.
    2. Ulyssea, Gabriel, 2010. "Regulation of entry, labor market institutions and the informal sector," Journal of Development Economics, Elsevier, vol. 91(1), pages 87-99, January.
    3. Spiegel, Samuel J., 2012. "Governance Institutions, Resource Rights Regimes, and the Informal Mining Sector: Regulatory Complexities in Indonesia," World Development, Elsevier, vol. 40(1), pages 189-205.
    4. Arvil V. Adams & Sara Johansson de Silva & Setareh Razmara, 2013. "Improving Skills Development in the Informal Sector : Strategies for Sub-Saharan Africa," World Bank Publications, The World Bank, number 15802, September.
    5. Sandra Sookram & Patrick Kent Watson, 2008. "Small-Business Participation in the Informal Sector of an Emerging Economy," Journal of Development Studies, Taylor & Francis Journals, vol. 44(10), pages 1531-1553.
    6. Eckhard Siggel, 2010. "The Indian informal sector: The impact of globalization and reform," International Labour Review, International Labour Organization, vol. 149(1), pages 93-105, March.
    7. Abhijit V. Banerjee & Esther Duflo, 2007. "The Economic Lives of the Poor," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 141-168, Winter.
    8. Bromley, Ray, 1978. "Introduction - the urban informal sector: Why is it worth discussing?," World Development, Elsevier, vol. 6(9-10), pages 1033-1039.
    9. repec:bla:rdevec:v:21:y:2017:i:4:p:939-961 is not listed on IDEAS
    10. Peattie, Lisa, 1987. "An idea in good currency and how it grew: The informal sector," World Development, Elsevier, vol. 15(7), pages 851-860, July.
    11. Lipton, Michael, 1980. "Migration from rural areas of poor countries: The impact on rural productivity and income distribution," World Development, Elsevier, vol. 8(1), pages 1-24, January.
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    informal sector; Timor-Leste;

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