Labor earnings dynamics in a developing economy with a large informal sector

Gomes, Diego B. P.; Iachan, Felipe S.; Santos, Cezar

doi:10.1016/j.jedc.2020.103854

Cited by 16 publications

(11 citation statements)

References 21 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Informal workers, for instance, usually have low earnings (Nezhyvenko and Adair, 2017), as well as other precarious workers. Informality is also subject to more volatile low earnings in developing worlds (Gomes et al, 2020). Bodea and Herman (2014) also supported the relationship between precariousness and working poverty in their research in Romania.…”

Section: Determinants Of Working Povertymentioning

confidence: 69%

Determinants of working poverty in Indonesia

Faharuddin

Endrawati

2022

JED

View full text Add to dashboard Cite

PurposeThe study’s first aim is to estimate the scale of working poverty using a nationwide household survey. The second aim is to answer the following research questions: is working enough to escape poverty, and what are the determinants of working poverty?Design/methodology/approachThe focus is on working people in Indonesia who have per capita household expenditure below the provincial poverty line. The determinant analysis used logistic regression on the first quarter of 2013 Susenas microdata.FindingsThe study found that the scale of the working poverty problem is equivalent to the scale of the poverty, although the in-work poverty rate is lower than the poverty rate in all provinces. The logistic regression results conclude that the three factors, namely individual-level, employment-related and household-level variables, have significant contributions to the incidence of the working poor in Indonesia.Practical implicationsSome practical implications for reducing the incidence of working poverty are increasing labor earnings through productivity growth and improving workers' skills, encouraging the labor participation of the poor and reducing precarious work. This study also suggests the need to continue assisting the working poor, particularly by increasing access to financial credit.Originality/valueResearch aimed at studying working poverty in Indonesia in the peer-reviewed literature is rare until now based on the authors' search. This study will fill the gap and provoke further research on working poverty in Indonesia.

show abstract

Section: Determinants Of Working Povertymentioning

confidence: 69%

Determinants of working poverty in Indonesia

Faharuddin

Endrawati

2022

JED

View full text Add to dashboard Cite

show abstract

“…Employers are excluded from their analysis. We follow Gomes et al (2020) in using the CTPS to differentiate between formal and informal private workers. As part of informal employment, we also include public employees without CTPS (we identify positive records, 2.5 percent of overall employment in 2012.Q1-2021.Q1), all domestic workers (including auxiliary family workers), and all employers.…”

Section: Discussionmentioning

confidence: 99%

“…The only exception is Brazil, for which we use an alternative definition that is close toGomes et al (2020). The official definition has been available since 2015.Q4.…”

mentioning

confidence: 99%

“…The business registration characterizes the former, which only the official definition in Brazil permits since 2015.Q4. To discriminate between formal and informal workers in Brazil, we followGomes et al (2020) in using a document issued by the Brazilian Ministry of Labor with information on job characteristics, such as compensation, that must be signed by employer and employee. This means that, as in asGomes et al (2020), self-employment is entirely classified as informal.…”

mentioning

confidence: 99%

See 1 more Smart Citation

Informal Labor Markets in Times of Pandemic: Evidence for Latin America and Policy Options

Leyva¹,

Urrutia²

2021

View full text Add to dashboard Cite

Se documenta la evolución de los mercados laborales de cinco países latinoamericanos durante la pandemia del COVID-19, con énfasis en el empleo informal. Se muestra, para la mayoría de países, una caída en el empleo agregado, reflejada en una caída en la participación laboral y una disminución de la tasa de informalidad. Esto último no tiene precedentes ya que la informalidad solía amortiguar la caída del empleo agregado en recesiones anteriores. Usando un modelo de ciclos económicos con una detallada estructura del mercado laboral, se recuperan los choques que racionalizan la recesión pandémica, mostrando que choques en la oferta laboral y de productividad en el sector informal son esenciales para dar cuenta de la pérdida de empleo y producción y del descenso en la tasa de informalidad.

show abstract

“…De Paula and Scheinkman (2011) test implications of a simple equilibrium model of informality using data from the ECINF and verify that formal activities are positively correlated with firms' size and informal firms employ a lower capital-labor ratio. Using a nationally representative Brazilian panel data that covers both formal and informal workers, Gomes et al (2020) study labor earnings dynamics and document that informality in Brazil is associated with more volatile earnings, while formal sector workers are subject to significant downside risk. See, also, Monteiro and Assuncao (2012) and de Paula and Scheinkman (2010).…”

Section: Introductionmentioning

confidence: 99%

Tolerance of Informality and Occupational Choices in a Large Informal Sector Economy

Arbex

Corrêa

Magalhaes

2022

The B.E. Journal of Macroeconomics

View full text Add to dashboard Cite

We study an equilibrium two-sector occupational choice model – agents can be (formal or informal) entrepreneurs or workers. An informal entrepreneur faces taxation determined by the combination of her capital choice and society’s tolerance of informality. Our model is consistent with many empirical findings regarding the informal sector in Brazil, a developing economy with a large informal sector. With a calibrated version of our model, we show that as society’s tolerance of informality decreases, the informal sector employs less capital and labor, and informality decreases. We conduct several counterfactual exercises. Informality is substantially lower in economies that are less tolerant of informal activities, formal entrepreneurs have more access to financial markets, and taxation of output and labor is lower. We extend the model to consider stochastic taxation of informal activities – a higher (average) informal output taxation and its variability reduce informality.

show abstract

Labor earnings dynamics in a developing economy with a large informal sector

Cited by 16 publications

References 21 publications

Determinants of working poverty in Indonesia

Determinants of working poverty in Indonesia

Informal Labor Markets in Times of Pandemic: Evidence for Latin America and Policy Options

Tolerance of Informality and Occupational Choices in a Large Informal Sector Economy

Contact Info

Product

Resources

About