Una Aplicación de la Descomposición Blinder–Oaxaca junto a regresiones por cuantiles de influencia recentrada al sector formal e informal y sus determinantes

An Application of the Blinder–Oaxaca Decomposition together with regressions by quantiles of recent influence to the formal and informal sector and their determinants

Juan Rodríguez Núñez and Isaac Enmanuel Guerra Salazar

MPRA Paper from University Library of Munich, Germany

Abstract: This paper studies the wage gap according to the formality status of workers, as well as the determinants of informal employment in the Dominican Republic. Estimates are made using microdata from the National Labor Force Survey, applying the Blinder-Oaxaca decomposition together with a recent extension of this methodology by quantiles through a regression model of recentered influence, in addition to logit models. In this sense, it is confirmed that there is a positive wage gap that favors formal workers over informal workers, in favor of the former. The greatest weight of this gap is because of returns, which implies that workers with similar characteristics receive different incomes between conditions of formality, alluding to a segmented labor market and a strong relative wage penalty for informal workers, which is intensified for women. To a lesser extent, this gap is explained by the endowment of factors such as workers' education and experience. Although the wage gap has narrowed in the last four years, it remains at 2005 levels, denoting a stagnation in terms of the wage gap between sectors. The results indicate that the conditions of individuals have an impact on their probability of working in the informal sector, as well as on the wage gap, with the educational level attained, the branch of activity, the planning region, the life cycle and the level of family income having an important influence. In relation to family income and age groups, the poor are the group most affected by informality and have the largest positive wage gap, with this effect decreasing as the level of family income increases. Similar results are recorded for the propensities of the informal sector, providing evidence in favor of low-income people entering the informal labor market as a means of subsistence and an escape valve due to fewer opportunities to enter the formal market.

Keywords: labor market; informal sector; informal employment; poverty; logit; wage gap; poverty; informal sector; logit; oaxaca blinder descomposition; market segmentation; discrimination; ENFT; labor market; labor market; quantile regression; recentering influence regressions; Propensity Score Matching (search for similar items in EconPapers)
JEL-codes: C01 D12 D14 I32 J31 J42 J46 J71 O12 O17 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/115683/1/MPRA_paper_115683.pdf original version (application/pdf)

Related works:
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:pra:mprapa:115683

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().