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Is Informal Sector Work an Alternative to Workfare Benefits? The Case of Pre-Program Expansion and Economic Crisis

Melanie Khamis ()

No 4614, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Limited availability of workfare programs and unemployment insurance and a large informal sector are features of the Argentine labor market at the outset of the 2001 economic crisis. This paper tests the hypothesis whether informal work is an alternative to workfare participation before a large-scale program expansion took place. Results from the propensity score matching indicate that observable characteristics of informal low-income workers and current workfare participants are significantly different. However, within these groups, it is possible to identify subgroups that exhibit similar observable characteristics. This indicates that only a subset of the individuals sees workfare and informal sector work as substitutable alternatives.

Keywords: workfare program; informal labor market; Argentina; South America; propensity score matching (search for similar items in EconPapers)
JEL-codes: J42 J48 O17 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2009-12
New Economics Papers: this item is included in nep-dev and nep-lab
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Published - published in: Review of Development Economics, 2012, 16 (4), 579–593

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