The formal sector wage premium and firm size

Eliane El Badaoui, Eric Strobl () and Frank Walsh

Journal of Development Economics, 2010, vol. 91, issue 1, 37-47

Abstract: We show theoretically that when larger firms pay higher wages and are more likely to be caught defaulting on labor taxes, then large-high wage firms will be in the formal and small-low wage firms will be in the informal sector. The formal sector wage premium is thus just a firm size wage differential. Using data from Ecuador we illustrate that firm size is indeed the key variable determining whether a formal sector premium exists.

Keywords: Formal; sector; wage; premium; Firm; size (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (39)

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Related works:
Working Paper: The Formal Sector Wage Premium and Firm Size (2010)
Working Paper: The formal sector wage premium and firm size (2010)
Working Paper: The Formal Sector Wage Premium and Firm Size (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:91:y:2010:i:1:p:37-47

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