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Informal Self-Employment and Macroeconomic Fluctuations

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dc.contributor.authorFiess, Norbert M.
dc.contributor.authorFugazza, Marco
dc.contributor.authorMaloney, William F.
dc.date.accessioned2012-03-30T07:34:16Z
dc.date.available2012-03-30T07:34:16Z
dc.date.issued2010
dc.description.abstractInformal self-employment is a major source of employment in developing countries. Its cyclical behavior is important to our understanding of the functioning of LDC labor markets, but turns out to be surprisingly complex. We develop a flexible model with two sectors: a formal salaried (tradable) sector that may be affected by wage rigidities, and an informal (non tradable) self-employment sector faced with liquidity constraints to entry. This labor market is then embedded in a standard small economy macro model. We show that different types of shocks interact with different institutional contexts to produce distinct patterns of comovement between key variables of the model: relative salaried/self-employed incomes, relative salaried/self-employed sector sizes and the real exchange rate. Model predictions are then tested empirically for Argentina, Brazil, Colombia, and Mexico. We confirm episodes where the expansion of informal self-employment is consistent with the traditional segmentation views of informality. However, we also identify episodes where informal self-employment behaves "pro-cyclically"; here, informality is driven by relative demand or productivity shocks to the non tradable sector.en
dc.identifier.citationJournal of Development Economics
dc.identifier.issn03043878
dc.identifier.urihttps://hdl.handle.net/10986/5734
dc.language.isoEN
dc.relation.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/igo
dc.rights.holderWorld Bank
dc.subjectEmployment
dc.subjectUnemployment
dc.subjectWages
dc.subjectIntergenerational Income Distribution
dc.subjectAggregate Human Capital E240
dc.subjectBusiness Fluctuations
dc.subjectCycles E320
dc.subjectLabor Demand J230
dc.subjectMacroeconomic Analyses of Economic Development O110
dc.subjectEconomic Development: Human Resources
dc.subjectHuman Development
dc.subjectIncome Distribution
dc.subjectMigration O150
dc.titleInformal Self-Employment and Macroeconomic Fluctuationsen
dc.title.alternativeJournal of Development Economicsen
dc.typeJournal Articleen
dc.typeArticle de journalfr
dc.typeArtículo de revistaes
dspace.entity.typePublication
okr.doctypeJournal Article
okr.externalcontentExternal Content
okr.identifier.externaldocumentum712
okr.journal.nbpages211-226
okr.language.supporteden
okr.peerreviewAcademic Peer Review
okr.region.countryArgentina
okr.region.countryBrazil
okr.region.countryColombia
okr.region.countryMexico
okr.relation.associatedurlhttp://dx.doi.org/10.1016/j.jdeveco.2009.09.009
okr.relation.associatedurlhttp://search.ebscohost.com/login.aspx?direct=true&db=eoh&AN=1081038&site=ehost-live
okr.relation.associatedurlhttp://www.elsevier.com/wps/find/journaldescription.cws_home/505546/description#description
okr.volume91
relation.isAuthorOfPublicationc7d4d195-f430-5039-b564-a3e95b24a117
relation.isAuthorOfPublication.latestForDiscoveryc7d4d195-f430-5039-b564-a3e95b24a117
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