Labor earnings dynamics in a developing economy with a large informal sector

Diego Gomes, Felipe Iachan and Cezar Santos

Journal of Economic Dynamics and Control, 2020, vol. 113, issue C

Abstract: We study labor earnings dynamics in a developing economy with a large informal sector. We use nationally representative Brazilian panel data that cover both formal and informal workers. We document large disparities in earnings fluctuations faced by these segments of the labor market, as well as the high frequency of transitions between them. Informality is associated with more volatile earnings, while workers in the formal sector are subject to significant downside risk. Transitions between formal and informal employment bring large asymmetric earnings shocks and have a frequency that depends on age and the initial earnings level.

Keywords: Earnings dynamics; Higher-order earnings risk; Non-Gaussian shocks; Informality (search for similar items in EconPapers)
JEL-codes: E24 E26 J24 J31 O17 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165188920300245
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Labor Earnings Dynamics in a Developing Economy with a Large Informal Sector (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:113:y:2020:i:c:s0165188920300245

DOI: 10.1016/j.jedc.2020.103854

Access Statistics for this article

Journal of Economic Dynamics and Control is currently edited by J. Bullard, C. Chiarella, H. Dawid, C. H. Hommes, P. Klein and C. Otrok

More articles in Journal of Economic Dynamics and Control from Elsevier
Bibliographic data for series maintained by Catherine Liu ().