IDEAS home Printed from https://ideas.repec.org/p/unu/wpaper/wp-2021-19.html
   My bibliography  Save this paper

Informality, labour transitions, and the livelihoods of workers in Latin America

Author

Listed:
  • Roxana Maurizio
  • Ana Paula Monsalvo

Abstract

This paper studies the incidence and heterogeneity of labour informality in six Latin American countries—Argentina, Brazil, Ecuador, Mexico, Paraguay, and Peru. We divide workers into five work statuses: formal wage-employed, formal self-employed, upper-tier informal wage-employed, lower-tier informal wage-employed, and informal self-employed. We evaluate the patterns of the occupational turnover between these work statuses and assess their impact on wage dynamics. In all the countries, wages are highest for formal workers and lowest for lower-tier informal jobs.

Suggested Citation

  • Roxana Maurizio & Ana Paula Monsalvo, 2021. "Informality, labour transitions, and the livelihoods of workers in Latin America," WIDER Working Paper Series wp-2021-19, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2021-19
    as

    Download full text from publisher

    File URL: https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2021-19-informality-labour-transitions-livelihoods-workers-Latin-America.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Arias, Omar & Khamis, Melanie, 2008. "Comparative Advantage, Segmentation and Informal Earnings: A Marginal Treatment Effects Approach," IZA Discussion Papers 3916, Institute of Labor Economics (IZA).
    2. Grimm, Michael & Knorringa, Peter & Lay, Jann, 2012. "Constrained Gazelles: High Potentials in West Africa’s Informal Economy," World Development, Elsevier, vol. 40(7), pages 1352-1368.
    3. Gustavo Henrique de Andrade & Miriam Bruhn & David McKenzie, 2016. "A Helping Hand or the Long Arm of the Law? Experimental Evidence on What Governments Can Do to Formalize Firms," The World Bank Economic Review, World Bank, vol. 30(1), pages 24-54.
    4. Cruces, Guillermo & Galiani, Sebastian & Kidyba, Susana, 2010. "Payroll taxes, wages and employment: Identification through policy changes," Labour Economics, Elsevier, vol. 17(4), pages 743-749, August.
    5. Almeida, Rita & Carneiro, Pedro, 2009. "Enforcement of labor regulation and firm size," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 28-46, March.
    6. Leopoldo Tornarolli & Diego Battistón & Leonardo Gasparini & Pablo Gluzmann, 2014. "Exploring Trends in Labor Informality in Latin America, 1990-2010," CEDLAS, Working Papers 0159, CEDLAS, Universidad Nacional de La Plata.
    7. Roxana MAURIZIO & Gustavo VÁZQUEZ, 2016. "Distribution effects of the minimum wage in four Latin American countries: Argentina, Brazil, Chile and Uruguay," International Labour Review, International Labour Organization, vol. 155(1), pages 97-131, March.
    8. Bertranou, Fabio. & Casanova, Luis. & Jiménez, Maribel. & Jiménez, Mónica., 2013. "Informalidad, calidad del empleo y segmentación laboral en Argentina," ILO Working Papers 994981293502676, International Labour Organization.
    9. Bosch, Mariano & Maloney, William F., 2010. "Comparative analysis of labor market dynamics using Markov processes: An application to informality," Labour Economics, Elsevier, vol. 17(4), pages 621-631, August.
    10. Luis Beccaria & Roxana Maurizio & Gustavo V�zquez, 2015. "Recent decline in wage inequality and formalization of the labour market in Argentina," International Review of Applied Economics, Taylor & Francis Journals, vol. 29(5), pages 677-700, September.
    11. Corseuil, Carlos Henrique L. & Foguel, Miguel Nathan, 2012. "Economic expansion and increase in labout market formality: A poaching approach," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 66(2), June.
    12. Enrique Alaniz & T.H. Gindling & Catherine Mata & Diego Rojas, 2020. "Transforming informal work and livelihoods in Costa Rica and Nicaragua," WIDER Working Paper Series wp-2020-100, World Institute for Development Economic Research (UNU-WIDER).
    13. Guilherme Delgado & Ana Carolina Querino & André Campos & Fábio Vaz & Leonardo Rangel & Matheus Stivali, 2007. "Avaliação do Simples: Implicações à Formalização Previdenciária," Discussion Papers 1277, Instituto de Pesquisa Econômica Aplicada - IPEA.
    14. Monteiro, Joana C.M. & Assunção, Juliano J., 2012. "Coming out of the shadows? Estimating the impact of bureaucracy simplification and tax cut on formality in Brazilian microenterprises," Journal of Development Economics, Elsevier, vol. 99(1), pages 105-115.
    15. Yapor, Mijail & Amarante, Verónica & Arim, Rodrigo, 2015. "Desigualdad e informalidad en el Uruguay," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 39655, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Valentina Rivera & Francisca Castro, 2021. "Between Social Protests and a Global Pandemic: Working Transitions under the Economic Effects of COVID-19," Social Sciences, MDPI, vol. 10(4), pages 1-21, April.
    2. Lippe, Rattiya Suddeephong & Ojeda Luna, Tatiana & Katajamäki, Waltteri & Schweinle, Jörg, 2023. "Labour informality in forestry: A longitudinal (2009–2020) cross-country analysis of determinants in 70 developing countries," Forest Policy and Economics, Elsevier, vol. 156(C).
    3. Juan Ponce & Jos'e-Ignacio Ant'on & Mercedes Onofa & Roberto Castillo, 2023. "The long-term impact of (un)conditional cash transfers on labour market outcomes in Ecuador," Papers 2309.17216, arXiv.org.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Roxana Maurizio & Luis Beccaria & Ana Monsalvo, 2022. "Labour Formalization and Inequality: The Distributive Impact of Labour Formalization in Latin America since 2000," Development and Change, International Institute of Social Studies, vol. 53(1), pages 117-165, January.
    2. Roxana Maurizio, 2015. "Transitions to Formality and Declining Inequality: Argentina and Brazil in the 2000s," Development and Change, International Institute of Social Studies, vol. 46(5), pages 1047-1079, September.
    3. Jessen, Jonas & Kluve, Jochen, 2021. "The effectiveness of interventions to reduce informality in low- and middle-income countries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 138.
    4. Olivier Bargain & Prudence Kwenda, 2014. "The Informal Sector Wage Gap: New Evidence Using Quantile Estimations on Panel Data," Economic Development and Cultural Change, University of Chicago Press, vol. 63(1), pages 117-153.
    5. Daniel Haanwinckel & Rodrigo R Soares, 2021. "Workforce Composition, Productivity, and Labour Regulations in a Compensating Differentials Theory of Informality [Search with Multi-worker Firms]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(6), pages 2970-3010.
    6. Gabriel Ulyssea, 2018. "Firms, Informality, and Development: Theory and Evidence from Brazil," American Economic Review, American Economic Association, vol. 108(8), pages 2015-2047, August.
    7. Fairris, David & Jonasson, Erik, 2016. "Determinants of Changing Informal Employment in Brazil, 2000–2010," MPRA Paper 71475, University Library of Munich, Germany.
    8. Albertini, Julien & Terriau, Anthony, 2019. "Informality over the life-cycle," Journal of Economic Dynamics and Control, Elsevier, vol. 105(C), pages 182-202.
    9. Rahman, Aminur, 2014. "Investment climate reforms and job creation in developing countries : what do we know and what should we do ?," Policy Research Working Paper Series 7025, The World Bank.
    10. Cabrera, José María & Cid, Alejandro & Bernatzky, Marianne Bernatzky, 2016. "The effect of one-on-one assistance on the compliance with labor regulation. A field experiment in extremely vulnerable settings," MPRA Paper 84639, University Library of Munich, Germany.
    11. Reeg, Caroline, 2015. "Micro and small enterprises as drivers for job creation and decent work," IDOS Discussion Papers 10/2015, German Institute of Development and Sustainability (IDOS).
    12. Melanie Khamis, 2014. "Formalization of jobs and firms in emerging market economies through registration reform," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-67, May.
    13. repec:ilo:ilowps:485515 is not listed on IDEAS
    14. Adoho, Franck M. & Doumbia, Djeneba, 2022. "Informal Sector Heterogeneity and Income Inequality: Evidence from The Democratic Republic of Congo," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 47(4), pages 55-77, December.
    15. John Bennett & Matthew D. Rablen, 2015. "Self-employment, wage employment, and informality in a developing economy," Oxford Economic Papers, Oxford University Press, vol. 67(2), pages 227-244.
    16. Cho, Yoon Y. & Robalino, David A. & Romero, Jose M., 2015. "Entering and Leaving Self-Employment: A Panel Data Analysis for 12 Developing Countries," IZA Discussion Papers 9358, Institute of Labor Economics (IZA).
    17. Abel,Martin & Carranza,Eliana & Geronimo,Kimberly Jean & Ortega Hesles,Maria Elena, 2022. "Can Temporary Wage Incentives Increase Formal Employment ? Experimental Evidence from Mexico," Policy Research Working Paper Series 10234, The World Bank.
    18. Molina-Vera, Andrea, 2021. "The impact of an extension of workers’ health insurance on formal employment: Evidence from Ecuador," World Development, Elsevier, vol. 141(C).
    19. Roxana Maurizio & Ana Paula Monsalvo & María Sol Catania & Silvana Martinez, 2023. "Short-term labour transitions and informality during the COVID-19 pandemic in Latin America," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 57(1), pages 1-21, December.
    20. François Gerard & Gustavo Gonzaga, 2016. "Informal Labor and the Efficiency Cost of Social Programs: Evidence from the Brazilian Unemployment Insurance Program," NBER Working Papers 22608, National Bureau of Economic Research, Inc.
    21. Aysit Tansel & Halil Ibrahim Keskin & Zeynel Abidin Ozdemir, 2015. "Is There An Infırmal Employment Wage Penalty in Egypt?," ERC Working Papers 1508, ERC - Economic Research Center, Middle East Technical University, revised Sep 2015.

    More about this item

    Keywords

    Informality; Occupational turnover; Education; Wages; Latin America; Occupations; Occupational mobility; Occupational choice;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:unu:wpaper:wp-2021-19. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Siméon Rapin (email available below). General contact details of provider: https://edirc.repec.org/data/widerfi.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.