Scandinavian Working Papers in Economics
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Department of Economics, Aarhus School of Business, University of Aarhus Working Papers, Department of Economics, Aarhus School of Business, University of Aarhus

No 09-8:
Participation and Sector Selection in Nicaragua

Dario Pozzoli () and Marco Ranzani ()

Abstract: This paper investigates the structure of the labor market in Nicaragua and is aimed at understanding the determinants of the choice between a number of segments, namely inactivity, unemployment, agriculture, formal and informal sector. In addition, a model with a separate participation equation is estimated: it allows understanding that age is mainly a supply side factor, while education is an important element determining employers’ choice. Information networks, captured by the presence of a household member working in the formal sector, and geographical barriers to mobility also play a leading role.

Keywords: Segmentation; Multisector labor markets; Nicaragua; (follow links to similar papers)

JEL-Codes: J42; O17; O54; (follow links to similar papers)

41 pages, May 15, 2009

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