Who Ends Up in Informality: Impact of Characteristics and Search Time
Revista de Economía del Caribe, No. 4, pp. 148-180, 2009
Posted: 25 Mar 2010 Last revised: 10 Jul 2012
Date Written: 2009
The purpose of this paper is to analyze informal employment in three metropolitan areas, Barranquilla, Cartagena y Montería using information from the second quarters of the Continuous Household Survey for years 2001 to 2005. Two definitions of informality were used, the official (DANE) and one based on social security (Pensions). Based on these, informal workers from the metropolitan areas are characterized according to their socioeconomic characteristics and the time it took them to find their current job. We find in general, that age, education, marital status and being head of a household plays a significant role in explaining the lower likelihood of becoming an informal worker, while longer spells of job searching increases this likelihood. As part of policy recommendations to reduce the incidence of informality in the Caribbean region are, to ensure at least the completion of secondary schooling, implementing programs that ensure younger worker’s insertion into the labor market and active labor market policies that reduce job searching spells.
Keywords: Informality, Labor Markets, Job Searching
JEL Classification: J21, J24, J42, J64
Suggested Citation: Suggested Citation