1 / 20 "Labour Exclusion and Informality in a Latin American country, a Latent Class model approach " Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
1 / 20
"Labour Exclusion and Informality in a LatinAmerican country, a Latent Class model
approach "
Jorge DavalosOIT Oficina Regional
Jornadas sobre Análisis del Mercado Laboral, 2013
Labour Exclusion and Informalityin a Latin American country
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
2 / 20
Motivation
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
3 / 20
Informal Employment (ILO’s perspective):
Motivation
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
3 / 20
Informal Employment (ILO’s perspective):
Informal jobs are those whose labour status is not clearly defined, likeundeclared labour lacking of social benefits or at poor working conditions
Motivation
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
3 / 20
Informal Employment (ILO’s perspective):
Informal jobs are those whose labour status is not clearly defined, likeundeclared labour lacking of social benefits or at poor working conditions
0 20 40 60 80Informal Employment (last available indicator in %)
Venezuela, Bolivarian Republic ofUruguay
PeruParaguayPanama
NicaraguaMexico
HondurasGuatemalaEl Salvador
EcuadorDominican Republic
Costa RicaColombia
BrazilBolivia
Argentina
Motivation
4 / 20
� Classical view. Informality is the result of segmentation i.e. exces of labour supply(Harris & Todaro 1970).Workers have no choice than to create an "informal" market !
� New Evidence:Informality may also be avoluntary status
� Dickens & Lang (1985),Magnac (1991)� The World Bank:
+Mondino & Montoya (2002),Maloney (1999), Saavedra & Chong(1999)+ Perry, Maloney, Arias, Fajnzylber, Mason & Saavedra-Chanduvi (2007)
Motivation
4 / 20
� Classical view. Informality is the result of segmentation i.e. exces of labour supply(Harris & Todaro 1970).Workers have no choice than to create an "informal" market !
� New Evidence:Informality may also be avoluntary status
� Dickens & Lang (1985),Magnac (1991)� The World Bank:
+Mondino & Montoya (2002),Maloney (1999), Saavedra & Chong(1999)+ Perry et al. (2007)
Motivation
4 / 20
� Classical view. Informality is the result of segmentation i.e. exces of labour supply(Harris & Todaro 1970).Workers have no choice than to create an "informal" market !
� New Evidence:Informality may also be avoluntary status
� Dickens & Lang (1985),Magnac (1991)� The World Bank:
+Mondino & Montoya (2002),Maloney (1999), Saavedra & Chong(1999)+ Perry et al. (2007)
Motivation
4 / 20
� Classical view. Informality is the result of segmentation i.e. exces of labour supply(Harris & Todaro 1970).Workers have no choice than to create an "informal" market !
� New Evidence:Informality may also be avoluntary status
� Dickens & Lang (1985),Magnac (1991)� The World Bank:
+Mondino & Montoya (2002),Maloney (1999), Saavedra & Chong(1999)+ Perry et al. (2007)
Motivation
4 / 20
� Classical view. Informality is the result of segmentation i.e. exces of labour supply(Harris & Todaro 1970).Workers have no choice than to create an "informal" market !
� New Evidence:Informality may also be avoluntary status
� Dickens & Lang (1985),Magnac (1991)� The World Bank:
+Mondino & Montoya (2002),Maloney (1999), Saavedra & Chong(1999)+ Perry et al. (2007)
Motivation
4 / 20
� Classical view. Informality is the result of segmentation i.e. exces of labour supply(Harris & Todaro 1970).Workers have no choice than to create an "informal" market !
� New Evidence:Informality may also be avoluntary status
� Dickens & Lang (1985),Magnac (1991)� The World Bank:
+Mondino & Montoya (2002),Maloney (1999), Saavedra & Chong(1999)+ Perry et al. (2007)
Motivation
4 / 20
� Classical view. Informality is the result of segmentation i.e. exces of labour supply(Harris & Todaro 1970).Workers have no choice than to create an "informal" market !
� New Evidence:Informality may also be avoluntary status
� Dickens & Lang (1985),Magnac (1991)� The World Bank:
+Mondino & Montoya (2002),Maloney (1999), Saavedra & Chong(1999)+ Perry et al. (2007)
Motivation
4 / 20
� Classical view. Informality is the result of segmentation i.e. exces of labour supply(Harris & Todaro 1970).Workers have no choice than to create an "informal" market !
� New Evidence:Informality may also be avoluntary status
� Dickens & Lang (1985),Magnac (1991)� The World Bank:
+Mondino & Montoya (2002),Maloney (1999), Saavedra & Chong(1999)+ Perry et al. (2007)
Motivation
4 / 20
� Classical view. Informality is the result of segmentation i.e. exces of labour supply(Harris & Todaro 1970).Workers have no choice than to create an "informal" market !
� New Evidence:Informality may also be avoluntary status
� Dickens & Lang (1985),Magnac (1991)� The World Bank:
+Mondino & Montoya (2002),Maloney (1999), Saavedra & Chong(1999)+ Perry et al. (2007)
Motivation
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
5 / 20
The drawbacks→challenges:
� Exit or Exclusion are explained by different theoretical approaches� Hard to (empirically) identify excluded from non excluded informals
(subjective surveys and only a few exist)
+ This paper’s methodology explains/proposes :
� How an existing unifying theoretical framework may nest both (exit andexclusion)
� An econometric model for classification based on widely available data(Household surveys)
Motivation
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
5 / 20
The drawbacks→challenges:
� Exit or Exclusion are explained by different theoretical approaches� Hard to (empirically) identify excluded from non excluded informals
(subjective surveys and only a few exist)
+ This paper’s methodology explains/proposes :
� How an existing unifying theoretical framework may nest both (exit andexclusion)
� An econometric model for classification based on widely available data(Household surveys)
Motivation
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
5 / 20
The drawbacks→challenges:
� Exit or Exclusion are explained by different theoretical approaches� Hard to (empirically) identify excluded from non excluded informals
(subjective surveys and only a few exist)
+ This paper’s methodology explains/proposes :
� How an existing unifying theoretical framework may nest both (exit andexclusion)
� An econometric model for classification based on widely available data(Household surveys)
Motivation
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
5 / 20
The drawbacks→challenges:
� Exit or Exclusion are explained by different theoretical approaches� Hard to (empirically) identify excluded from non excluded informals
(subjective surveys and only a few exist)
+ This paper’s methodology explains/proposes :
� How an existing unifying theoretical framework may nest both (exit andexclusion)
� An econometric model for classification based on widely available data(Household surveys)
Motivation
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
5 / 20
The drawbacks→challenges:
� Exit or Exclusion are explained by different theoretical approaches� Hard to (empirically) identify excluded from non excluded informals
(subjective surveys and only a few exist)
+ This paper’s methodology explains/proposes :
� How an existing unifying theoretical framework may nest both (exit andexclusion)
� An econometric model for classification based on widely available data(Household surveys)
Motivation
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
5 / 20
The drawbacks→challenges:
� Exit or Exclusion are explained by different theoretical approaches� Hard to (empirically) identify excluded from non excluded informals
(subjective surveys and only a few exist)
+ This paper’s methodology explains/proposes :
� How an existing unifying theoretical framework may nest both (exit andexclusion)
� An econometric model for classification based on widely available data(Household surveys)
Theoretical framework
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
6 / 20
� Homogeneous productivity across workers� Workers receive job (wage) offers at random frequencies∼ Pλ
if λ → ∞⇒ perfect competition equilibrium� Two groups of workers with heterogenous information availability:
λ1 < λ2
Main implications:
Workers with less information stay at lower paid or less satisfactory jobs
This paper suggests :
� Workers atλ1 → segmented ones from Harris and Todaro model
Thus, Excluded workers may be identified to the group with lessinformation availability λ1
Theoretical framework
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
6 / 20
Burdett & Mortensen (1998) job search model, basic setup:
� Homogeneous productivity across workers� Workers receive job (wage) offers at random frequencies∼ Pλ
if λ → ∞⇒ perfect competition equilibrium� Two groups of workers with heterogenous information availability:
λ1 < λ2
Main implications:
Workers with less information stay at lower paid or less satisfactory jobs
This paper suggests :
� Workers atλ1 → segmented ones from Harris and Todaro model
Thus, Excluded workers may be identified to the group with lessinformation availability λ1
Theoretical framework
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
6 / 20
Burdett & Mortensen (1998) job search model, basic setup:
� Homogeneous productivity across workers� Workers receive job (wage) offers at random frequencies∼ Pλ
if λ → ∞⇒ perfect competition equilibrium� Two groups of workers with heterogenous information availability:
λ1 < λ2
Main implications:
Workers with less information stay at lower paid or less satisfactory jobs
This paper suggests :
� Workers atλ1 → segmented ones from Harris and Todaro model
Thus, Excluded workers may be identified to the group with lessinformation availability λ1
Theoretical framework
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
6 / 20
Burdett & Mortensen (1998) job search model, basic setup:
� Homogeneous productivity across workers� Workers receive job (wage) offers at random frequencies∼ Pλ
if λ → ∞⇒ perfect competition equilibrium� Two groups of workers with heterogenous information availability:
λ1 < λ2
Main implications:
Workers with less information stay at lower paid or less satisfactory jobs
This paper suggests :
� Workers atλ1 → segmented ones from Harris and Todaro model
Thus, Excluded workers may be identified to the group with lessinformation availability λ1
Theoretical framework
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
6 / 20
Burdett & Mortensen (1998) job search model, basic setup:
� Homogeneous productivity across workers� Workers receive job (wage) offers at random frequencies∼ Pλ
if λ → ∞⇒ perfect competition equilibrium� Two groups of workers with heterogenous information availability:
λ1 < λ2
Main implications:
Workers with less information stay at lower paid or less satisfactory jobs
This paper suggests :
� Workers atλ1 → segmented ones from Harris and Todaro model
Thus, Excluded workers may be identified to the group with lessinformation availability λ1
Theoretical framework
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
6 / 20
Burdett & Mortensen (1998) job search model, basic setup:
� Homogeneous productivity across workers� Workers receive job (wage) offers at random frequencies∼ Pλ
if λ → ∞⇒ perfect competition equilibrium� Two groups of workers with heterogenous information availability:
λ1 < λ2
Main implications:
Workers with less information stay at lower paid or less satisfactory jobs
This paper suggests :
� Workers atλ1 → segmented ones from Harris and Todaro model
Thus, Excluded workers may be identified to the group with lessinformation availability λ1
Theoretical framework
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
6 / 20
Burdett & Mortensen (1998) job search model, basic setup:
� Homogeneous productivity across workers� Workers receive job (wage) offers at random frequencies∼ Pλ
if λ → ∞⇒ perfect competition equilibrium� Two groups of workers with heterogenous information availability:
λ1 < λ2
Main implications:
Workers with less information stay at lower paid or less satisfactory jobs
This paper suggests :
� Workers atλ1 → segmented ones from Harris and Todaro model
Thus, Excluded workers may be identified to the group with lessinformation availability λ1
Theoretical framework
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
6 / 20
Burdett & Mortensen (1998) job search model, basic setup:
� Homogeneous productivity across workers� Workers receive job (wage) offers at random frequencies∼ Pλ
if λ → ∞⇒ perfect competition equilibrium� Two groups of workers with heterogenous information availability:
λ1 < λ2
Main implications:
Workers with less information stay at lower paid or less satisfactory jobs
This paper suggests :
� Workers atλ1 → segmented ones from Harris and Todaro model
Thus, Excluded workers may be identified to the group with lessinformation availability λ1
Theoretical framework
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
6 / 20
Burdett & Mortensen (1998) job search model, basic setup:
� Homogeneous productivity across workers� Workers receive job (wage) offers at random frequencies∼ Pλ
if λ → ∞⇒ perfect competition equilibrium� Two groups of workers with heterogenous information availability:
λ1 < λ2
Main implications:
Workers with less information stay at lower paid or less satisfactory jobs
This paper suggests :
� Workers atλ1 → segmented ones from Harris and Todaro model
Thus, Excluded workers may be identified to the group with lessinformation availability λ1
Theoretical framework
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
6 / 20
Burdett & Mortensen (1998) job search model, basic setup:
� Homogeneous productivity across workers� Workers receive job (wage) offers at random frequencies∼ Pλ
if λ → ∞⇒ perfect competition equilibrium� Two groups of workers with heterogenous information availability:
λ1 < λ2
Main implications:
Workers with less information stay at lower paid or less satisfactory jobs
This paper suggests :
� Workers atλ1 → segmented ones from Harris and Todaro model
Thus, Excluded workers may be identified to the group with lessinformation availability λ1
Theoretical framework
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
6 / 20
Burdett & Mortensen (1998) job search model, basic setup:
� Homogeneous productivity across workers� Workers receive job (wage) offers at random frequencies∼ Pλ
if λ → ∞⇒ perfect competition equilibrium� Two groups of workers with heterogenous information availability:
λ1 < λ2
Main implications:
Workers with less information stay at lower paid or less satisfactory jobs
This paper suggests :
� Workers atλ1 → segmented ones from Harris and Todaro model
Thus, Excluded workers may be identified to the group with lessinformation availability λ1
Theoretical Implications
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
7 / 20
� Lower wages:wR < wR̄
� Less satisfactory jobs:SR < SR̄
� Higher probability (J )of a job search:JR > JR̄
� Higher unemployment probability
Empirically :
� Exclusion state (R) → unobserved� wages and a job seeking status & unemployment→ available� Job quality→ Informality Status (Pagés & Madrigal 2008)
Theoretical Implications
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
7 / 20
A lower λ ≡ Exclusion (R) implies :
� Lower wages:wR < wR̄
� Less satisfactory jobs:SR < SR̄
� Higher probability (J )of a job search:JR > JR̄
� Higher unemployment probability
Empirically :
� Exclusion state (R) → unobserved� wages and a job seeking status & unemployment→ available� Job quality→ Informality Status (Pagés & Madrigal 2008)
Theoretical Implications
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
7 / 20
A lower λ ≡ Exclusion (R) implies :
� Lower wages:wR < wR̄
� Less satisfactory jobs:SR < SR̄
� Higher probability (J )of a job search:JR > JR̄
� Higher unemployment probability
Empirically :
� Exclusion state (R) → unobserved� wages and a job seeking status & unemployment→ available� Job quality→ Informality Status (Pagés & Madrigal 2008)
Theoretical Implications
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
7 / 20
A lower λ ≡ Exclusion (R) implies :
� Lower wages:wR < wR̄
� Less satisfactory jobs:SR < SR̄
� Higher probability (J )of a job search:JR > JR̄
� Higher unemployment probability
Empirically :
� Exclusion state (R) → unobserved� wages and a job seeking status & unemployment→ available� Job quality→ Informality Status (Pagés & Madrigal 2008)
Theoretical Implications
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
7 / 20
A lower λ ≡ Exclusion (R) implies :
� Lower wages:wR < wR̄
� Less satisfactory jobs:SR < SR̄
� Higher probability (J )of a job search:JR > JR̄
� Higher unemployment probability
Empirically :
� Exclusion state (R) → unobserved� wages and a job seeking status & unemployment→ available� Job quality→ Informality Status (Pagés & Madrigal 2008)
Theoretical Implications
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
7 / 20
A lower λ ≡ Exclusion (R) implies :
� Lower wages:wR < wR̄
� Less satisfactory jobs:SR < SR̄
� Higher probability (J )of a job search:JR > JR̄
� Higher unemployment probability
Empirically :
� Exclusion state (R) → unobserved� wages and a job seeking status & unemployment→ available� Job quality→ Informality Status (Pagés & Madrigal 2008)
Theoretical Implications
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
7 / 20
A lower λ ≡ Exclusion (R) implies :
� Lower wages:wR < wR̄
� Less satisfactory jobs:SR < SR̄
� Higher probability (J )of a job search:JR > JR̄
� Higher unemployment probability
Empirically :
� Exclusion state (R) → unobserved� wages and a job seeking status & unemployment→ available� Job quality→ Informality Status (Pagés & Madrigal 2008)
Theoretical Implications
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
7 / 20
A lower λ ≡ Exclusion (R) implies :
� Lower wages:wR < wR̄
� Less satisfactory jobs:SR < SR̄
� Higher probability (J )of a job search:JR > JR̄
� Higher unemployment probability
Empirically :
� Exclusion state (R) → unobserved� wages and a job seeking status & unemployment→ available� Job quality→ Informality Status (Pagés & Madrigal 2008)
Theoretical Implications
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
7 / 20
A lower λ ≡ Exclusion (R) implies :
� Lower wages:wR < wR̄
� Less satisfactory jobs:SR < SR̄
� Higher probability (J )of a job search:JR > JR̄
� Higher unemployment probability
Empirically :
� Exclusion state (R) → unobserved� wages and a job seeking status & unemployment→ available� Job quality→ Informality Status (Pagés & Madrigal 2008)
Theoretical Implications
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
7 / 20
A lower λ ≡ Exclusion (R) implies :
� Lower wages:wR < wR̄
� Less satisfactory jobs:SR < SR̄
� Higher probability (J )of a job search:JR > JR̄
� Higher unemployment probability
Empirically :
� Exclusion state (R) → unobserved� wages and a job seeking status & unemployment→ available� Job quality→ Informality Status (Pagés & Madrigal 2008)
The Latent Class Model
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
8 / 20
wage (w)
X R labour status (S)
job seek(J )
Figure 1: Model’s structure
The Latent Exclusion RegimeR
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
9 / 20
� Exclusion :
R =
{
1 Excluded ifR∗ ≥ 00 Non-excluded otherwise
� Its specification :
π
g(π)I.
tR = 1 R = 0
Figure 2:Labour productivities, supply(blue) and demand(red) density functions
The Latent Exclusion RegimeR
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
9 / 20
� Exclusion :
R =
{
1 Excluded ifR∗ ≥ 00 Non-excluded otherwise
� Its specification :
π
g(π)I.
tR = 1 R = 0
Figure 2:Labour productivities, supply(blue) and demand(red) density functions
The Latent Exclusion RegimeR
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
9 / 20
� Exclusion :
R =
{
1 Excluded ifR∗ ≥ 00 Non-excluded otherwise
� Its specification :
π
g(π)I.
tR = 1 R = 0
Figure 2:Labour productivities, supply(blue) and demand(red) density functions
The Latent Exclusion RegimeR
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
10 / 20
� Exclusion :
R =
{
1 Excluded ifR∗ ≥ 00 Non-excluded otherwise
� Its specification :
π
g(π)II.
t1 t2R = 1 R = 1R = 0
Figure 3:Labour productivities, supply(blue) and demand(red) density functions
Indicators specification
11 / 20
Indicators specification
11 / 20
Table 1: Endogenous variables densities and cdf’s
Definition Specification
P [J |x,R]Probability of the dichotomous job seeking in-dicatorJ .
Logit∗
P [S|x,R]
Probability of observing the Labour statuswhereS is qualitative and nominal. The fourlabour status categories inS are formal, inde-pendent, informal and unemployed
Mixed multinomial logit∗
fu(w|x,R,S)Observed wage density function , whereustands for the residual term.
Linear regression∗
P [R|x]Probability of the underlying dichotomousregime
Logit∗
∗ Linked to the other model equations through the mixing distributionψ(ε)
The Data
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
12 / 20
� Brazil 2004 household survey (PNAD)� Male individuals between 18 and 65 years old� Workers with 2 or more jobs are not considered (2.5% of the sample)� Four labour categories: formals, independents,informals and
unemployed
Informality . Workers whose current job is not registered on theirworking card. Not registered jobs are not covered by the labour marketregulation.
The Data
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
12 / 20
� Brazil 2004 household survey (PNAD)� Male individuals between 18 and 65 years old� Workers with 2 or more jobs are not considered (2.5% of the sample)� Four labour categories: formals, independents,informals and
unemployed
Informality . Workers whose current job is not registered on theirworking card. Not registered jobs are not covered by the labour marketregulation.
The Data
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
12 / 20
� Brazil 2004 household survey (PNAD)� Male individuals between 18 and 65 years old� Workers with 2 or more jobs are not considered (2.5% of the sample)� Four labour categories: formals, independents,informals and
unemployed
Informality . Workers whose current job is not registered on theirworking card. Not registered jobs are not covered by the labour marketregulation.
The Data
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
12 / 20
� Brazil 2004 household survey (PNAD)� Male individuals between 18 and 65 years old� Workers with 2 or more jobs are not considered (2.5% of the sample)� Four labour categories: formals, independents,informals and
unemployed
Informality . Workers whose current job is not registered on theirworking card. Not registered jobs are not covered by the labour marketregulation.
The Data
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
12 / 20
� Brazil 2004 household survey (PNAD)� Male individuals between 18 and 65 years old� Workers with 2 or more jobs are not considered (2.5% of the sample)� Four labour categories: formals, independents,informals and
unemployed
Informality . Workers whose current job is not registered on theirworking card. Not registered jobs are not covered by the labour marketregulation.
The Data
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
12 / 20
� Brazil 2004 household survey (PNAD)� Male individuals between 18 and 65 years old� Workers with 2 or more jobs are not considered (2.5% of the sample)� Four labour categories: formals, independents,informals and
unemployed
Informality . Workers whose current job is not registered on theirworking card. Not registered jobs are not covered by the labour marketregulation.
Exclusion probability
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
13 / 20
Exclusion probability
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
13 / 20
Table 2: Unconditional exclusion probability(P [R = 1]), logit estimated parameters.
Variable parameters
White(race) -1.3(0.15)
Years of education(Urban) -0.08(0.02)
Years of education 0.04a
(0.04)Years of education(> 15) -0.84
(0.19)Urban 0.62
(0.19)Potential Experience -0.53
(0.06)Sqrd. Potl. Exp./100 0.73
(0.08)Educ.× Potl.Exper./100 0.57
(0.12)
Exclusion probability
14 / 20
Exclusion probability
14 / 20
Figure 4:Exclusion probability and potential experience (by ethnicgroups )
Potential experience
Exc
lusi
on P
roba
bilit
y
0.2
0.4
0.6
0.8
10 20 30 40
factor(ethnic)
Other
White
Exclusion probability
15 / 20
Exclusion probability
15 / 20
Figure 5:Exclusion probability and years of education
Years of education
Exc
lusi
on P
roba
bilit
y
0.2
0.4
0.6
0.8
2 4 6 8 10 12 14
factor(POEXP)
6
10
15
35
Exclusion probability
15 / 20
Figure 5:Exclusion probability and years of education
Years of education
Exc
lusi
on P
roba
bilit
y
0.2
0.4
0.6
0.8
2 4 6 8 10 12 14
factor(POEXP)
6
10
15
35
Exclusion seems toincreasewith education... !
Results
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
16 / 20
� Urban→ Exclusion� Education→ Exclusion
But other empirical evidence supports these findings Ernst (2008) :
� Structural change in Brazil’s labour market since the early90’s, caused asystematic increase of the lower and middle skilled labour demand
� It also increased the urban unemployment rates : urban unemployment≈ 10% rural unemployment≈ 1%
Results
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
16 / 20
Counterintuitive...
� Urban→ Exclusion� Education→ Exclusion
But other empirical evidence supports these findings Ernst (2008) :
� Structural change in Brazil’s labour market since the early90’s, caused asystematic increase of the lower and middle skilled labour demand
� It also increased the urban unemployment rates : urban unemployment≈ 10% rural unemployment≈ 1%
Results
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
16 / 20
Counterintuitive...
� Urban→ Exclusion� Education→ Exclusion
But other empirical evidence supports these findings Ernst (2008) :
� Structural change in Brazil’s labour market since the early90’s, caused asystematic increase of the lower and middle skilled labour demand
� It also increased the urban unemployment rates : urban unemployment≈ 10% rural unemployment≈ 1%
Results
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
16 / 20
Counterintuitive...
� Urban→ Exclusion� Education→ Exclusion
But other empirical evidence supports these findings Ernst (2008) :
� Structural change in Brazil’s labour market since the early90’s, caused asystematic increase of the lower and middle skilled labour demand
� It also increased the urban unemployment rates : urban unemployment≈ 10% rural unemployment≈ 1%
Results
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
16 / 20
Counterintuitive...
� Urban→ Exclusion� Education→ Exclusion
But other empirical evidence supports these findings Ernst (2008) :
� Structural change in Brazil’s labour market since the early90’s, caused asystematic increase of the lower and middle skilled labour demand
� It also increased the urban unemployment rates : urban unemployment≈ 10% rural unemployment≈ 1%
Results
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
16 / 20
Counterintuitive...
� Urban→ Exclusion� Education→ Exclusion
But other empirical evidence supports these findings Ernst (2008) :
� Structural change in Brazil’s labour market since the early90’s, caused asystematic increase of the lower and middle skilled labour demand
� It also increased the urban unemployment rates : urban unemployment≈ 10% rural unemployment≈ 1%
Results
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
16 / 20
Counterintuitive...
� Urban→ Exclusion� Education→ Exclusion
But other empirical evidence supports these findings Ernst (2008) :
� Structural change in Brazil’s labour market since the early90’s, caused asystematic increase of the lower and middle skilled labour demand
� It also increased the urban unemployment rates :urban unemployment≈ 10% rural unemployment≈ 1%
Results
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
16 / 20
Counterintuitive...
� Urban→ Exclusion� Education→ Exclusion
But other empirical evidence supports these findings Ernst (2008) :
� Structural change in Brazil’s labour market since the early90’s, caused asystematic increase of the lower and middle skilled labour demand
� It also increased the urban unemployment rates : urban unemployment≈ 10% rural unemployment≈ 1%
Classification
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
17 / 20
Table 3:Estimated labor status and exclusion regime distribution
formal independent informal unemployed
Non-excluded 0.25 0.15 0.05 0.02 0.47
Excluded 0.23 0.08 0.12 0.10 0.530.48 0.23 0.17 0.12
Based on estimated posterior probabilities
Concluding Remarks
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
18 / 20
� Estimated parameters reflect the structural shocks in the labour market(education and urban→R)
� From labour status probabilities given exclusionP [S|R] :
� Education unambiguously reduces exclusion at any labour status� The estimated share of excluded within the informal sector≈ 70%� Exclusion mainly affects informality and unemployment
Concluding Remarks
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
18 / 20
� Estimated parameters reflect the structural shocks in the labour market(education and urban→R)
� From labour status probabilities given exclusionP [S|R] :
� Education unambiguously reduces exclusion at any labour status� The estimated share of excluded within the informal sector≈ 70%� Exclusion mainly affects informality and unemployment
Concluding Remarks
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
18 / 20
� Estimated parameters reflect the structural shocks in the labour market(education and urban→R)
� From labour status probabilities given exclusionP [S|R] :
� Education unambiguously reduces exclusion at any labour status� The estimated share of excluded within the informal sector≈ 70%� Exclusion mainly affects informality and unemployment
Concluding Remarks
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
18 / 20
� Estimated parameters reflect the structural shocks in the labour market(education and urban→R)
� From labour status probabilities given exclusionP [S|R] :
� Education unambiguously reduces exclusion at any labour status� The estimated share of excluded within the informal sector≈ 70%� Exclusion mainly affects informality and unemployment
Concluding Remarks
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
18 / 20
� Estimated parameters reflect the structural shocks in the labour market(education and urban→R)
� From labour status probabilities given exclusionP [S|R] :
� Education unambiguously reduces exclusion at any labour status� The estimated share of excluded within the informal sector≈ 70%� Exclusion mainly affects informality and unemployment
Concluding Remarks
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
18 / 20
� Estimated parameters reflect the structural shocks in the labour market(education and urban→R)
� From labour status probabilities given exclusionP [S|R] :
� Education unambiguously reduces exclusion at any labour status� The estimated share of excluded within the informal sector≈ 70%� Exclusion mainly affects informality and unemployment
Thank you!
Labour Exclusion andInformality in a LatinAmerican country
Thank you!
19 / 20
Thank you!
Labour Exclusion andInformality in a LatinAmerican country
Thank you!
19 / 20
Labour Exclusion andInformality in a LatinAmerican country
Thank you!
20 / 20
Labour Exclusion andInformality in a LatinAmerican country
Thank you!
20 / 20
Labour Exclusion andInformality in a LatinAmerican country
Thank you!
20 / 20
Related Documents
