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Human Capital and Women’s Informal Work: Theory and Evidence

Jean-Louis Bago (), Wamadini M. Souratié, Ernest Ouédraogo and Pam Zahonogo
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Jean-Louis Bago: Governement of Quebec, Canada
Wamadini M. Souratié: University of Dedougou, Burkina Faso
Ernest Ouédraogo: University Ouaga II, Burkina Faso
Pam Zahonogo: University Ouaga II, Burkina Faso

Journal of Economic Development, 2022, vol. 47, issue 3, 1-28

Abstract: Informal employment among developing countries’ women continues to impair their emancipation from chronic poverty, although there has been progress in recent decades. In sub-Saharan Africa, not only do women lag behind men in educational attainments, they are also overrepresented in low-paid informal employments. In the literature, marriage and childbearing are seen to be the cause of both low educational attainments and high prevalence of informal employment among sub-Saharan African women. However, this prediction ignores the significance of human capital as a determinant of employability in the formal sector. In this paper, we use micro-level data from Niger in combination with the instrumental variables approach to analyze the causal effect of a female’s level of education - a proxy for human capital - on the likelihood of informal employment. A theoretical job-search model highlighting the mechanism driving this causal effect guides our empirical analysis. We find that an additional year of schooling completed lowers the probability that a female is informally employed by 3.99% to 6.12%. Our theoretical model explains this relationship by the fact that, in informal employments, the opportunity cost of leisure and childbearing rises with a female education, due to the flexibility of hours worked for this type of employment.

Keywords: Women; Human Capital; Education; Informal Employment; Job-search (search for similar items in EconPapers)
JEL-codes: J24 J46 O17 (search for similar items in EconPapers)
Date: 2022
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