 On the empirical content of the formal-informal labor market segmentation hypothesisGabriel Ulyssea () and Ricardo Paes de Barros () Brazilian Review of Econometrics, 2010, vol. 30, issue 2 Abstract: To date, the empirical literature on the formal-informal labor market segmentation hypothesis has largely focused on the analysis of wage determination in both sectors. The underlying premise in this literature is that, under segmentation, equally productive workers receive higher wages if located in the formal sector. Thus, identifying the existence of wage differentials between equally productive workers would imply that the labor market is segmented. The objective of this paper is to examine the extent to which the premise behind this literature actually has empirical content, and whether or not one can actually identify the existence of segmentation by analyzing wage data alone. For that, we develop a simple framework to describe the main determinants of the cross-sectional wage distributions in both sectors. We show that the evidence can be supported by completely different models of labor market functioning. It thus seems unlikely that one can actually identify the existence of labor market segmentation by analyzing data on wages alone. Date: 2010 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sbe:breart:v:30:y:2010:i:2:a:3648 Access Statistics for this article Brazilian Review of Econometrics is currently edited by Daniel Monte More articles in Brazilian Review of Econometrics from Sociedade Brasileira de Econometria - SBE Contact information at EDIRC. |
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