Informal Employment in a Growing and Globalizing Low-Income Country

34 Pages Posted: 27 Jan 2015

See all articles by Brian McCaig

Brian McCaig

Wilfrid Laurier University - School of Business & Economics

Nina Pavcnik

Dartmouth College - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: January 2015

Abstract

We document several facts about workforce transitions from the informal to the formal sector in Vietnam, a fast growing, industrializing, and low-income country. First, younger workers, particularly migrants, are more likely to work in the formal sector and stay there permanently. Second, the decline in the aggregate share of informal employment occurs through changes between and within birth cohorts. Third, younger, educated, male, and urban workers are more likely to switch to the formal sector than other workers initially in the informal sector. Poorly educated, older, female, rural workers face little prospect of formalization. Fourth, formalization coincides with occupational upgrading.

Suggested Citation

McCaig, Brian and Pavcnik, Nina, Informal Employment in a Growing and Globalizing Low-Income Country (January 2015). NBER Working Paper No. w20891. Available at SSRN: https://ssrn.com/abstract=2555431

Brian McCaig (Contact Author)

Wilfrid Laurier University - School of Business & Economics

Waterloo, Ontario N2L 3C5
Canada

Nina Pavcnik

Dartmouth College - Department of Economics ( email )

6106 Rockefeller Hall
Hanover, NH 03755
United States
603-646-2537 (Phone)
603-646-2122 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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