IDEAS home Printed from https://ideas.repec.org/a/pid/journl/v51y2012i4p543-564.html
   My bibliography  Save this article

Is Informal Sector Employment Marginal to Formal Sector Growth?

Author

Listed:
  • Nadia Tahir

    (University of Lahore, Lahore)

  • Pervez Tahir

    (former Chief Economist, Planning Commission, Islamabad)

Abstract

This paper discusses existing scenario of informal sector employment and socio-economic challenges faced by informal worker in search of “decent work.” We supplement the Labour Force Surveys (LFS) with a socioeconomic survey in five towns of Lahore to profile home-based workers, street vendors, and waste pickers. LFS is used to estimate the percentage distribution of employed labour force in the informal sector by applying dynamic panel data model. Random effect and Arellano and Bond (1991) GMM style dynamic panel model outperforms other experiments in terms of consistency of estimator and efficiency gains. The results show that wages in formal sector and overall GDP growth are countercyclical and manufacturing sector growth is procyclical with informal employment. There is unobserved gender heterogeneity and no latent time effect. It is the only work opportunity for the low skilled. Informal sector continues to be marginal to the formal sector but a dynamic subset exists in the manufacturing sector.

Suggested Citation

  • Nadia Tahir & Pervez Tahir, 2012. "Is Informal Sector Employment Marginal to Formal Sector Growth?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 51(4), pages 543-564.
    • Handle: RePEc:pid:journl:v:51:y:2012:i:4:p:543-564
    as

    Download full text from publisher

    File URL: http://www.pide.org.pk/pdf/PDR/2012/Volume4/543-564.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Informal Sector; Employment; Wages; Women; Panel Data;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:51:y:2012:i:4:p:543-564. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Khurram Iqbal (email available below). General contact details of provider: https://edirc.repec.org/data/pideipk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.