Informality and Productivity in the Labor Market: Peru 1986 - 2001

36 Pages Posted: 25 Apr 2011

See all articles by Alberto Chong

Alberto Chong

University of Ottawa

José Galdo

Syracuse University - Department of Economics; IZA Bonn

Jaime Saavedra-Chanduví

affiliation not provided to SSRN

Date Written: July 2007

Abstract

Peru has one of the highest informality rates in Latin America, with almost 60 percent of the urban labor force working at the margins of labor market legislation or in microenterprises that lack basic labor market standards (Marcouiller, Ruiz de Castilla, and Woodruff, 1997). This paper identifies two factors that can explain the variation in informality rates in the 1990s. First, Peru experienced a steady increase in employment allocation in traditionally “informal” sectors—in particular, retail trade and transport. Second, there was a sharp increase in nonwage labor costs, despite a reduction in the average productivity of the economy. In addition, the paper illustrates the negative correlation between productivity and informality by evaluating the impacts of the PROJOVEN youth training program.

Suggested Citation

Chong, Alberto and Galdo, José and Saavedra-Chanduví, Jaime, Informality and Productivity in the Labor Market: Peru 1986 - 2001 (July 2007). IDB Working Paper No. 511, Available at SSRN: https://ssrn.com/abstract=1820879 or http://dx.doi.org/10.2139/ssrn.1820879

Alberto Chong (Contact Author)

University of Ottawa ( email )

2292 Edwin Crescent
Ottawa, Ontario K2C 1H7
Canada

José Galdo

Syracuse University - Department of Economics ( email )

Syracuse, NY 13244-1020
United States

IZA Bonn

P.O. Box 7240
Bonn, D-53072
Germany

Jaime Saavedra-Chanduví

affiliation not provided to SSRN

No Address Available

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
143
Abstract Views
850
rank
224,833
PlumX Metrics