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Informality sectoral selection and earnings in Uruguay

ISSNAño: 2010
AutorAutor/es: Ceni Gonzalez, Rodrigo , Bucheli, Marisa
EditorialEditorial: Estudios Económicos, vol. 25(2)
Nº de PáginasNº de Páginas: 291-307

In this paper we define an informal worker as one who is not contribut- ing to the social security system. We analyze the likelihood of being an informal worker, and we estimate the differentials in earnings between sectors using the OLS estimation and a switching regression model. We find that formality is more likely among the better-educated, and among men, those residing in the capital city, and heads of households. In addition, we find that according to five different proxies of the av- erage gap for salaried workers and several sub-samples, earnings are higher in the formal than in the informal sector for all the samples.


 
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