Working Papers, Department of Economics, Lund University
No 2011:3:
Informal and Formal Sector Participation and Earnings in a LDC: The Importance of Time and Migration
Peter Karpestam ()
Abstract: Theoretical and empirical research points to potentially
different patterns of labor recruitment and importance of social networks
in the formal and informal sector. The paper touches upon this topic and
investigates the conjecture that employment chances and expected earnings
depend differently on individuals’ allocation of time and mobility patterns
in the informal and formal sector. This is investigated in a LDC context
using a household survey from Guatemala (Encovi 2000). The results suggest
that the probability to obtain employment in agriculture (informal sector)
increases with the amount of time spent at the current residence. The
results are reversed for (informal) uncovered wage workers. For the
(informal) self-employed and the formal sector (covered wage workers) the
results does not display any evident patterns. Merging all segments of the
informal sector, the results show that expected earnings in the informal
sector are slightly reduced by time not spent at the current residence.
Keywords: The Informal Sector; Labor; Migration; Time; Central America; Guatemala.; (follow links to similar papers)
JEL-Codes: D13; J60; J70; O17; R23; (follow links to similar papers)
41 pages, January 18, 2011
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