labour exclusion and informality in a latin american country, a … · jorge davalos oit oficina...
TRANSCRIPT
![Page 1: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/1.jpg)
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
![Page 2: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/2.jpg)
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
![Page 3: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/3.jpg)
Motivation
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
3 / 20
Informal Employment (ILO’s perspective):
![Page 4: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/4.jpg)
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
![Page 5: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/5.jpg)
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
![Page 6: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/6.jpg)
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)
![Page 7: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/7.jpg)
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)
![Page 8: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/8.jpg)
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)
![Page 9: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/9.jpg)
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)
![Page 10: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/10.jpg)
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)
![Page 11: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/11.jpg)
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)
![Page 12: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/12.jpg)
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)
![Page 13: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/13.jpg)
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)
![Page 14: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/14.jpg)
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)
![Page 15: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/15.jpg)
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)
![Page 16: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/16.jpg)
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)
![Page 17: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/17.jpg)
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)
![Page 18: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/18.jpg)
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)
![Page 19: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/19.jpg)
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)
![Page 20: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/20.jpg)
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)
![Page 21: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/21.jpg)
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
![Page 22: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/22.jpg)
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
![Page 23: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/23.jpg)
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
![Page 24: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/24.jpg)
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
![Page 25: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/25.jpg)
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
![Page 26: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/26.jpg)
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
![Page 27: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/27.jpg)
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
![Page 28: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/28.jpg)
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
![Page 29: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/29.jpg)
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
![Page 30: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/30.jpg)
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
![Page 31: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/31.jpg)
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
![Page 32: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/32.jpg)
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)
![Page 33: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/33.jpg)
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)
![Page 34: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/34.jpg)
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)
![Page 35: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/35.jpg)
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)
![Page 36: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/36.jpg)
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)
![Page 37: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/37.jpg)
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)
![Page 38: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/38.jpg)
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)
![Page 39: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/39.jpg)
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)
![Page 40: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/40.jpg)
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)
![Page 41: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/41.jpg)
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)
![Page 42: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/42.jpg)
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
![Page 43: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/43.jpg)
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
![Page 44: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/44.jpg)
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
![Page 45: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/45.jpg)
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
![Page 46: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/46.jpg)
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
![Page 47: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/47.jpg)
Indicators specification
11 / 20
![Page 48: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/48.jpg)
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)
![Page 49: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/49.jpg)
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.
![Page 50: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/50.jpg)
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.
![Page 51: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/51.jpg)
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.
![Page 52: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/52.jpg)
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.
![Page 53: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/53.jpg)
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.
![Page 54: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/54.jpg)
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.
![Page 55: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/55.jpg)
Exclusion probability
Labour Exclusion andInformality in a LatinAmerican country
Motivation
The Model
The Econometric Model
Results
Concluding Remarks
13 / 20
![Page 56: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/56.jpg)
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)
![Page 57: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/57.jpg)
Exclusion probability
14 / 20
![Page 58: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/58.jpg)
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
![Page 59: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/59.jpg)
Exclusion probability
15 / 20
![Page 60: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/60.jpg)
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
![Page 61: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/61.jpg)
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... !
![Page 62: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/62.jpg)
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%
![Page 63: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/63.jpg)
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%
![Page 64: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/64.jpg)
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%
![Page 65: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/65.jpg)
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%
![Page 66: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/66.jpg)
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%
![Page 67: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/67.jpg)
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%
![Page 68: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/68.jpg)
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%
![Page 69: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/69.jpg)
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%
![Page 70: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/70.jpg)
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
![Page 71: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/71.jpg)
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
![Page 72: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/72.jpg)
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
![Page 73: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/73.jpg)
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
![Page 74: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/74.jpg)
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
![Page 75: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/75.jpg)
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
![Page 76: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/76.jpg)
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
![Page 77: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/77.jpg)
Thank you!
Labour Exclusion andInformality in a LatinAmerican country
Thank you!
19 / 20
![Page 78: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/78.jpg)
Thank you!
Labour Exclusion andInformality in a LatinAmerican country
Thank you!
19 / 20
![Page 79: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/79.jpg)
Labour Exclusion andInformality in a LatinAmerican country
Thank you!
20 / 20
![Page 80: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/80.jpg)
Labour Exclusion andInformality in a LatinAmerican country
Thank you!
20 / 20
![Page 81: Labour Exclusion and Informality in a Latin American country, a … · Jorge Davalos OIT Oficina Regional Jornadas sobre Análisis del Mercado Laboral, 2013. Labour Exclusion and](https://reader035.vdocument.in/reader035/viewer/2022071215/6045da4b705af24d8411d539/html5/thumbnails/81.jpg)
Labour Exclusion andInformality in a LatinAmerican country
Thank you!
20 / 20