Informal employment and happiness: Model with endogenous regressors

Andrey Aistov, Alexander Larin () and Lyudmila Leonova ()
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Alexander Larin: Higher School of Economics (Nizhnii Novgorod) Russia
Lyudmila Leonova: Higher School of Economics (Nizhnii Novgorod) Russia

Applied Econometrics, 2012, vol. 26, issue 2, 17-36

Abstract: In the paper relation between the unregistered employment and life satisfaction is investigated. Endogeneity of the employment status and income is described by the system of simultaneous equations with random individual effects. The system is estimated with maximum likelihood on the Russia Longitudinal Monitoring Survey of HSE (RLMS-HSE) data. The key result of the paper is that informal status does not necessary decrease the level of life satisfaction. For example, if income were fixed, men would be more satisfied with their lifes in the unregistered employements in comparison with the registered jobs, ceteris paribus. The same are for women, but only in the cases when earnings are unfixed (they are a bit higher in the unregistered unemployement).

Keywords: informal employment; unregistered employment; life satisfaction; endogeneous income; endogeneous job status; simultaneous equations system; likelihood function; RLMS-HSE; panel data. (search for similar items in EconPapers)
JEL-codes: C01 C33 C35 D69 J21 J32 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (2)

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