Segmented or Competitive Labor Markets

Magnac, Thierry

doi:10.2307/2938245

Cited by 241 publications

(167 citation statements)

References 12 publications

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“…Magnac (1991) models this scenario in a way that will prove useful for interpreting our results: A worker's choice to become self-employed (D SE ) is given by…”

Section: The Correlated Random Coefficients Modelmentioning

confidence: 99%

Entrepreneurship versus joblessness: Explaining the rise in self-employment

Falco

Haywood

2016

Journal of Development Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract A large share of the workforce throughout the developing world is self-employed, and this proportion has increased in recent decades. Assessments of this development vary, with pull factors such as high returns to capital contrasted with push factors such as barriers to more desirable salaried jobs. Using a long panel dataset from Ghana, we empirically investigate the changing structure of earnings in self-employment relative to salaried work. Our analysis allows workers to sort into self-employment for different reasons, including expected earnings differentials and endogenous capital accumulation whilst highlighting constraints workers may face. We estimate a correlated random coefficient model using IV-GMM, taking into account the endogeneity of sector choice and capital accumulation. We find that returns to productive characteristics in selfemployment have increased significantly between 2004 and 2011 whilst self-employment has attracted increasingly skilled workers. This points against the negative view of selfemployment as an occupation of last resort. JEL: O15, J24, J42, C14 Terms of use: Documents in EconStor may

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“…Magnac (1991) models this scenario in a way that will prove useful for interpreting our results: A worker's choice to become self-employed (D SE ) is given by…”

Section: The Correlated Random Coefficients Modelmentioning

confidence: 99%

Entrepreneurship versus joblessness: Explaining the rise in self-employment

Falco

Haywood

2016

Journal of Development Economics

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“…Other authors that analyze agents' choice of sector are Magnac (1991) and Heckman and Sedlacek (1990).…”

Section: Introductionmentioning

confidence: 99%

Sectoral labour supply, choice restrictions and functional form

Dagsvik

Strøm

2006

J of Applied Econometrics

144

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In this paper we discuss a general framework for analyzing labor supply behavior in the presence of complicated budget-and quantity constraints of which some are unobserved. The point of departure is that an individual's labor supply decision can be considered as a choice from a set of discrete alternatives (jobs). These jobs are characterized by attributes such as hours of work, sector specific wages and other sector specific aspects of the jobs. We focus in particular on theoretical justification of functional form assumptions and properties of the random components of the model. The paper includes an empirical application based on Norwegian data, in which the labor supply of married women is estimated.JEL classification: J22,C51.Key words: Labor supply, non-convex budget sets, non-pecuniary job-attributes, sector-specific wages. ___________________________________ * Statistics Norway, Oslo. E-mail: john.dagsvik@ssb.no ** Department of Economics, University of Oslo. E-mail: steinar.strom@econ.uio.no We are indebted to Tom Wennemo for skillful programming assistance and Rolf Aaberge for constructive critisism throughout the revision process. We thank two anonymous referees and the editor for useful comments and helpful suggestions.We also thank James J. Heckman for valuable comments on an earlier version of the paper and Anne Skoglund for proof reading and word processing. S.Strøm is grateful to ICER, Turin, for providing excellent working conditions. 2

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“…Admittedly, they do not constitute a comprehensive measure of welfare nor do they allow testing directly the hypothesis of segmentation on the labor market (Heckman and Sedlacek, 1985, Magnac, 1991, Gindling, 1991, Maloney, 1999); yet they provide a …rst important step on the way. If inter-sectoral pay inequalities are too large to re ‡ect pure compensating di¤erentials across sectors, they may suggest the existence of rigidities and the need for policy action to restore e¢ ciency and to improve the …nancial conditions of the poorest workers.…”

Section: Introductionmentioning

confidence: 99%

The Informal Sector Wage Gap: New Evidence Using Quantile Estimations on Panel Data

Bargain

Kwenda

2014

Economic Development and Cultural Change

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This paper provides new evidence on the wage gap between informal and formal salary workers in South Africa, Brazil and Mexico. We use rich datasets that allow us to define informality in a relatively comparable fashion across countries. We compute precise wage differentials by accounting for taxes paid in the formal sector. For each country, we analyze how the sector wage gap varies within groups, between groups and over time. To account for unobserved heterogeneity, we use large (unbalanced) panels to estimate fixed effects models at the mean and at different quantiles of the wage distribution. We find that unobserved heterogeneity explains a large part of the (conditional) wage gap. The remaining informal sector wage penalty is large in the lower part of the distribution but almost disappears at the top. The penalty primarily concerns young workers and is found to be procyclical. We carefully investigate the robustness of these results and discuss their policy implications as well as regularities across countries. JEL Classification:J21, J23, J24, J31, C14, O17

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Segmented or Competitive Labor Markets

Cited by 241 publications

References 12 publications

Entrepreneurship versus joblessness: Explaining the rise in self-employment

Entrepreneurship versus joblessness: Explaining the rise in self-employment

Sectoral labour supply, choice restrictions and functional form

The Informal Sector Wage Gap: New Evidence Using Quantile Estimations on Panel Data

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