Competitive and Segmented Informal Labor Markets

Günther, Isabel () and Andrey Launov ()
Additional contact information
Günther, Isabel: ETH Zurich
Authors registered in the RePEc Author Service: Isabel Günther

No 2349, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: It has been recently argued that the informal sector of the labor market in a developing economy shows a dual structure with one part of it being competitive to the formal sector and another part being the result of market segmentation. To test this hypothesis we formulate an econometric model which allows for a heterogeneous informal sector with unobserved individual affiliation and which takes into account selection bias induced by the employment decision of individuals. Our test results for the urban labor market in Côte d'Ivoire indeed show existence of both competitive and segmented employment in the informal sector.

Keywords: segmentation; informal labor market; comparative advantage; selection bias; developing economy; finite mixture models; latent structure (search for similar items in EconPapers)
JEL-codes: J42 O17 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2006-09
New Economics Papers: this item is included in nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Published - revised version published as 'Informal employment in developing countries: Opportunity or last resort?' in: Journal of Development Economics, 2012, 97 (1), 88-98

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Related works:
Working Paper: Competitive and Segmented Informal Labor Markets (2007)
Working Paper: Competitive and Segmented Informal Labor Markets (2006)
Working Paper: Competitive and Segmented Informal Labor Markets (2006)
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