Do Workers in Chile Choose Informal Employment? A Dynamic Analysis of Sector Choice
56 Pages Posted: 20 Apr 2016
Date Written: May 1, 2007
Abstract
The degree to which a labor market is segmented and jobs in the formal sector of the economy are rationed is critical to the analysis of coverage of social insurance and pensions. Using unique panel data spanning the 1998-99 contraction in Chile, the author finds little evidence that self-employment is the residual sector of a dualistic labor market, as is often depicted in the literature. Data on transitions between sectors show that self-employment is not a free-entry sector, and that entrepreneurs can be pushed out of self-employment just as others are pushed out of formal employment during economic downturns. But employment without a contract does exhibit many of the features of the free-entry, employment safety net depicted in the dualistic literature. An annex to this paper presents supportive evidence from static analysis of selection-corrected wage differentials and a comment on the drawbacks of this approach.
Keywords: Labor Markets, Labor Standards, Work & Working Conditions, Labor Management and Relations, Educational Policy and Planning
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Measuring the Impact of Minimum Wages: Evidence from Latin America
By William F. Maloney and Jairo Nunez
-
Measuring the Impact of Minimum Wages: Evidence from Latin America
By William F. Maloney and Jairo Nunez
-
The Effects of Minimum Wages on the Distribution of Family Incomes: A Non-Parametric Analysis
By David Neumark, Mark Schweitzer, ...
-
Do Minimum Wages Fight Poverty?
By David Neumark and William Wascher
-
The Effects of Minimum Wages on the Distribution of Family Incomes: A Nonparametric Analysis
By David Neumark, Mark Schweitzer, ...
-
The Structure of Labor Markets in Developing Countries: Time Series Evidence on Competing Views
-
Quitting and Labor Turnover: Microeconomic Evidence and Macroeconomic Consequences
By Tom Krebs and William F. Maloney
-
Logit Analysis in a Rotating Panel Context and an Application to Self-Employment Decisions
By Patricio Aroca and William F. Maloney