Labor Market Search, Informality and Schooling Investments

Bobba, Matteo; Flabbi, Luca; Levy, Santiago

doi:10.2139/ssrn.3305507

Cited by 4 publications

(24 citation statements)

References 49 publications

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“…Thus, between 2008-2012, all these non-salary costs summed up to 52.3 percent of the wage of the worker and after the 2012 tax reform they represented 47.3 percent of the average wage of the workers. Overall, it is fair to say that formal employment is costly in monetary 1 For documents using contributions to social security as definition of informality, see: Pratap and Quintin (2006) and Bobba, Flabbi, and Levy (2018). For papers using firm size as a measure of informality, see: Tannuri-Pianto et al (2004).…”

Section: Labor Regulation In Colombia and Informalitymentioning

confidence: 99%

Blame it on the Rain: The Effects of Weather Shocks on Formal Rural Employment in Colombia

Otero-Cortés¹,

Bohorquez-Penuela²

2020

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Section: Labor Regulation In Colombia and Informalitymentioning

confidence: 99%

Blame it on the Rain: The Effects of Weather Shocks on Formal Rural Employment in Colombia

Otero-Cortés¹,

Bohorquez-Penuela²

2020

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“…The literature focusing on the worker side is smaller and rarely takes into account human capital accumulation in the presence of high informality. In a companion paper [Bobba et al, 2017], we study the issue focusing on human capital accumulation decisions before entering the labor market. In this paper, we move our attention to the dynamic of human capital that takes place after entering the labor market.…”

Section: Introductionmentioning

confidence: 99%

“…This is a significant empirical regularity that is often neglected by the literature focusing on the supply side of the labor market. For example, Bosch and Esteban-Pretel [2012]; Garcia [2015]; Meghir et al [2015]; Bobba et al [2017] do not account for this type of labor market transition.…”

Section: Introductionmentioning

confidence: 99%

Labor Market Search, Informality, and On-the-Job Human Capital Accumulation

et al. 2019

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“…Bobba, Flabbi, and Levy (2017) develop a search and bargaining model where firms and workers form matches (jobs) that can be formal or informal. Modeling some of the distortions present in Mexico's labor market, they show that the returns to education follow a path consistent with the findings in this paper, with the additional effect of a disincentive for individuals to invest in higher levels of education.…”

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confidence: 99%

Persistent Misallocation and the Returns to Education in Mexico

Levy

López-Calva

2018

The World Bank Economic Review

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Over the last two decades, Mexico has experienced macroeconomic stability, an open trade regime, and substantial progress in education. Yet average workers’ earnings have stagnated, and earnings of those with higher schooling have fallen, compressing the earnings distribution and lowering the returns to education. This paper argues that distortions that misallocate resources toward less-productive firms explain these phenomena, because these firms are less intensive in well-educated workers compared with more-productive ones. It shows that while the relative supply of workers with more years of schooling has increased, misallocation of resources toward less-productive firms has persisted. These two trends have generated a widening mismatch between the supply of, and the demand for, educated workers. The paper breaks down worker earnings into observable and unobservable firm and individual worker characteristics, and computes a counterfactual earnings distribution in the absence of misallocation. The main finding is that in the absence of misallocation average earnings would be higher, and that earnings differentials across schooling levels would widen, raising the returns to education. A no-misallocation path is constructed for the wage premium. Depending on parameter values, this path is found to be rising or constant, in contrast to the observed downward path. The paper concludes arguing that the persistence of misallocation impedes Mexico from taking full advantage of its investments in the education of its workforce.

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Labor Market Search, Informality and Schooling Investments

Cited by 4 publications

References 49 publications

Blame it on the Rain: The Effects of Weather Shocks on Formal Rural Employment in Colombia

Blame it on the Rain: The Effects of Weather Shocks on Formal Rural Employment in Colombia

Labor Market Search, Informality, and On-the-Job Human Capital Accumulation

Persistent Misallocation and the Returns to Education in Mexico

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