The Informal Sector Wage Gap: New Evidence Using Quantile Estimations on Panel Data

This paper provides new evidence on the wage gap between informal and formal salary workers in South Africa, Brazil and Mexico. We use rich datasets that allow us to define informality in a relatively comparable fashion across countries. We compute precise wage differentials by accounting for taxes paid in the formal sector. For each country, we analyze how the sector wage gap varies within groups, between groups and over time. To account for unobserved heterogeneity, we use large (unbalanced) panels to estimate fixed effects models at the mean and at different quantiles of the wage distribution. We find that unobserved heterogeneity explains a large part of the (conditional) wage gap. The remaining informal sector wage penalty is large in the lower part of the distribution but almost disappears at the top. The penalty primarily concerns young workers and is found to be procyclical. We carefully investigate the robustness of these results and discuss their policy implications as well as regularities across countries.wage gap, informal sector, quantile regression, fixed effects model, selection

The Informal Sector Wage Gap - New Evidence Using Quantile Estimations on Panel Data

This paper provides new evidence on the wage gap between informal and formal salary workers in South Africa, Brazil and Mexico. We use rich datasets that allow us to define informality in a relatively comparable fashion across countries. We compute precise wage differentials by accounting for taxes paid in the formal sector. For each country, we analyze how the sectoral wage gap varies within groups, between groups and over time. To account for unobserved heterogeneity, we use large (unbalanced) panels to estimate fixed effects models at the mean and at di¤erent points of the wage distribution. We find that unobserved heterogeneity explains a large part of the (conditional) wage gap. The remaining informal sector wage penalty is large in the lower part of the distribution but almost disappears at the top. The penalty primarily concerns young workers and is found to be procyclical. We carefully investigate the robustness of these results and discuss their policy implications as well as regularities across countries.wage gap, informal sector, quantile regression, fixed effects model, selection

Is Informality Bad? Evidence from Brazil, Mexico and South Africa

The informal sector plays an important role in the functioning of labor markets in emerging economies. To characterize better this highly heterogeneous sector, we conduct a distributional analysis of the earnings gap between informal and formal employment in Brazil, Mexico and South Africa, distinguishing between dependent and independent workers. For each country, we use rich panel data to estimate fixed effects quantile regressions to control for (time-invariant) unobserved heterogeneity. The dual nature of the informal sector emerges from our results. In the high-tier segment, self-employed workers receive a significant earnings premium that may compensate the benefits obtained in formal jobs. In the lower end of the earnings distribution, both informal wage earners and independent (own account) workers face significant earnings penalties vis-à-vis the formal sector. Yet the dual structure is not balanced in the same way in all three countries. Most of the self-employment carries a premium in Mexico. In contrast, the upper-tier segment is marginal in South Africa, and informal workers, both dependent and independent, form a largely penalized group. More consistent with the competitive view, earnings differentials are small at all levels in Brazil.quantile regression, earnings differential, informal sector, salary work, self-employed, fixed effects model

The Informal Sector Wage Gap: New Evidence Using Quantile Estimations on Panel Data

This paper provides new evidence on the wage gap between informal and formal salary workers in South Africa, Brazil and Mexico. We use rich datasets that allow us to define informality in a relatively comparable fashion across countries. We compute precise wage differentials by accounting for taxes paid in the formal sector. For each country, we analyze how the sector wage gap varies within groups, between groups and over time. To account for unobserved heterogeneity, we use large (unbalanced) panels to estimate fixed effects models at the mean and at different quantiles of the wage distribution. We find that unobserved heterogeneity explains a large part of the (conditional) wage gap. The remaining informal sector wage penalty is large in the lower part of the distribution but almost disappears at the top. The penalty primarily concerns young workers and is found to be procyclical. We carefully investigate the robustness of these results and discuss their policy implications as well as regularities across countries.wage gap, informal sector, quantile regression, fixed effects model, selection

The Informal Sector Wage Gap: New Evidence Using Quantile Regressions on Panel Data

This paper provides new evidence on the wage gap bewteen informal and formal salary workers in South Africa, Brazil and Mexico. We use rich datasets that allow us to define informality in a relatively comparable fashion across countries. We compute precise wage differentials by accounting for taxes paid in the formal sector. For each country, we analyze how the sector wage gap varies within groups, bewteen groups and over time. To account for unobserved heterogeneity, we use large (unbalanved) panels to estimate fixed effects models at the mean and at different quantiles of the wage distribution. We find that unobserved heterogeneity explains a large part of the (conditional) wage gap. The remaining informal sector wage penalty is large in the lower part of the distribution but almost disappears at the top. The penalty primarily concerns young workers and is found to be procyclical. We carefully investigate the robustness of these results and discuss their policy implications as well as regularities across countries.

Intrahousehold Distribution and Child Poverty: Theory and Evidence from Côte d’Ivoire

Poverty measures in developing countries often ignore the distribution of resources within families and the gains from joint consumption. In this paper, we extend the collective model of household consumption to recover mother's, father's and children's shares together with economies of scale, using the observation of adult-specific goods and an extended version of the Rothbarth method. The application on data from Côte d'Ivoire shows that children command a reasonable fraction of household resources, though not enough to avoid a very large extent of child poverty compared to what is found in traditional measures based on per capita expenditure. We find no significant evidence of discrimination against girls, and educated mothers have more command over household resources. Baseline results on children's shares are robust to using alternative identifying assumptions, which consolidates a general approach grounded on a flexible version of the Rothbarth method. Individual measures of poverty show that parents are highly compensated by the scale economies due to joint consumption.collective model, consumer demand, Engel curves, Rothbarth method, cost of children, bargaining power, sharing rule, scale economies, equivalence scales, indifference scales

Factors influencing male partner involvement in the mother-to-child transmission of HIVplus (MTCT-plus) programme in Gobabis district, Namibia: a qualitative study

Magister Public Health - MPHBackground: Although great strides have been made in reducing mother-to-child transmission of HIV (MTCT) in Namibia, the universal target of less than 5% by 2015 has not yet been achieved. In an effort to scale-up services in the programme, a comprehensive family centred approach which broadens HIV prevention activities and considers HIV as a family disease was instituted. However its success has been affected by low male partner participation in the programme. Study aim: To investigate factors influencing male partner involvement in MTCT-plus programme in Gobabis District, Omaheke Region, Namibia. Study design and data collection: This was a cross sectional descriptive study that wasconducted using a qualitative research methodology. Data was generated through focus group discussions (FGDs) and in-depth interviews. Four same sex FGDs were conducted with men and pregnant women. The study participants were HIV positive pregnant women and HIV positive women in their postnatal period purposefully selected from the PMTCT clients. A few male participants were partners of the female participants and other men conveniently sampled from the community. Seven in-depth interviews were conducted to gather information from key informants who were programme managers and midwives. Thematic analysis was used for the data analysis. Results: Men were generally knowledgeable and appreciated the importance of participating in the MTCT-plus programme but the majority of them did not participate. They cited several barriers to actively supporting their partners. Men‘s participation in the MTCT-plus programme was affected by lack of trust in the health workers and cultural practices that shift the role of taking care of their partners to the biological parents. The other barriers included HIV related stigma, unfriendly environment at the antenatal care clinics, time and work related constraints, having many sexual partners and gender and power imbalances in relationships that affect patterns of communication on HIV related matters. Discussion: Participation in the MTCT-plus programme is well supported by men. However, few men put this into practice because of complexities surrounding their specific role in women reproductive health issues, as well as cultural practices and health facilities organizational structures that preclude men from participation in the MTCT-plus programme. Given the positive attitude by men towards participation in this programme, creating a male friendly space within the MTCT-plus programme and empowering men to participate in them should be prioritized for the programme to achieve its goals

Intrahousehold Distribution and Child Poverty: Theory and Evidence from Côte d'Ivoire

Poverty measures in developing countries often ignore the distribution of resources within families and the gains from joint consumption. In this paper, we extend the collective model of household consumption to recover mother's, father's and children's shares together with economies of scale, using the observation of adult-specific goods and an extended version of the Rothbarth method. The application on data from Côte d'Ivoire shows that children command a reasonable fraction of household resources, though not enough to avoid a very large extent of child poverty compared to what is found in traditional measures based on per capita expenditure. We find no significant evidence of discrimination against girls, and educated mothers have more command over household resources. Baseline results on children's shares are robust to using alternative identifying assumptions, which consolidates a general approach grounded on a flexible version of the Rothbarth method. Individual measures of poverty show that parents are highly compensated by the scale economies due to joint consumption.Collective Model, Consumer Demand, Engel Curves, Rothbarth Method, Cost of Children, Bargaining Power, Sharing rule, Scale Economies, Equivalence Scales, Indifference Scales

Is informality bad? Evidence from Brazil, Mexico and South Africa

The informal sector plays an important role in the functioning of labor markets in emerging economies. To characterize better this highly heterogeneous sector, we conduct a distributional analysis of the earnings gap between informal and formal employment in Brazil, Mexico and South Africa, distinguishing between dependent and independent workers. For each country, we use rich panel data to estimate fixed effects quantile regressions to control for (time-invariant) unobserved heterogeneity. The dual nature of the informal sector emerges from our results. In the high-tier segment, self-employed workers receive a significant earnings premium that may compensate the benefits obtained in formal jobs. In the lower end of the earnings distribution, both informal wage earners and independent (own account) workers face significant earnings penalties vis-à-vis the formal sector. Yet the dual structure is not balanced in the same way in all three countries. Most of the self-employment carries a premium in Mexico. In contrast, the upper-tier segment is marginal in South Africa, and informal workers, both dependent and independent, form a largely penalized group. More consistent with the competitive view, earnings differentials are small at all levels in Brazil

The Formal Sector Wage Premium and Firm Size for Self-employed Workers

We develop a model where workers may enter self-employment or search for jobs as employees and where there is heterogeneity across workers’ managerial ability. Workers with higher skills will manage larger firms while workers with low managerial ability will run smaller firms and will be in self-employment only when they cannot find a salaried job. For these workers self-employment is a secondary/informal form of employment. The Burdett and Mortensen (1998) equilibrium search model is used for illustration as a special case of our more general framework. Empirical evidence from Mexico is provided and demonstrates that firm size wage effects for employees and selfemployed workers are broadly consistent with the model.Self-employment, Managerial ability, Informal sector