Informal Employment in a Growing and Globalizing Low-Income Country
- (pp. 545-50)
Abstract
We document several facts about workforce transitions from the informal to the formal sector in Vietnam, a fast growing, industrializing, and low-income country. First, younger workers, particularly migrants, are more likely to work in the formal sector and stay there permanently. Second, the decline in the aggregate share of informal employment occurs through changes between and within birth cohorts. Third, younger, educated, male, and urban workers are more likely to switch to the formal sector than other workers initially in the informal sector. Poorly educated, older, female, rural workers face little prospect of formalization. Fourth, formalization coincides with occupational upgrading.Citation
McCaig, Brian, and Nina Pavcnik. 2015. "Informal Employment in a Growing and Globalizing Low-Income Country." American Economic Review, 105 (5): 545-50. DOI: 10.1257/aer.p20151051Additional Materials
JEL Classification
- E26 Informal Economy; Underground Economy
- F66 Economic Impacts of Globalization: Labor
- J16 Economics of Gender; Non-labor Discrimination
- J46 Informal Labor Markets
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
- P23 Socialist Systems and Transitional Economies: Factor and Product Markets; Industry Studies; Population
- P36 Socialist Institutions and Their Transitions: Consumer Economics; Health; Education and Training: Welfare, Income, Wealth, and Poverty