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Employed Unemployed? On Shadow Employment During Transition

  • Joanna Tyrowicz

    ()

    (Faculty of Economic Sciences, University of Warsaw
    National Bank of Poland
    Rimini Center for Economic Analysis)

  • Stanisław Cichocki

    ()

    (Faculty of Economic Sciences, University of Warsaw
    National Bank of Poland)

Unregistered employment poses two types of challenges to the researchers: (i) reliably evaluating the wage differential between formally and informally employed and (ii) accounting for the push and pull factors in general and the effects of business cycle in particular. We address the former with the use of propensity score matching and analyse the evolution of the estimated average compensations and the differentials with reference to GDP and unemployment fluctuations. Using 13 years of quarterly labour force survey data from Poland on de iure unemployed but de facto employed individuals we find, that in-the-shadow compensations tend to be higher and procyclical. We also find considerable distributional heterogeneity.

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File URL: http://www.wne.uw.edu.pl/inf/wyd/WP/WNE_WP28.pdf
File Function: First version, 2010
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Paper provided by Faculty of Economic Sciences, University of Warsaw in its series Working Papers with number 2010-05.

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Length: XX pages
Date of creation: 2010
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Handle: RePEc:war:wpaper:2010-05
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  23. Bosch, Mariano & Goni, Edwin & Maloney, William F., 2007. "The Determinants of Rising Informality in Brazil: Evidence from Gross Worker Flows," IZA Discussion Papers 2970, Institute for the Study of Labor (IZA).
  24. Francesco Busato & Bruno Chiarini, 2004. "Market and underground activities in a two-sector dynamic equilibrium model," Economic Theory, Springer, vol. 23(4), pages 831-861, May.
  25. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
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