Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278923 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16225
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
The paper performs both a parametric and non-parametric analysis to address a fundamental question in the growing literature using search models to study labor market informality: should informal self-employment and informal employment as employee be considered two different labor market states? Both the non-parametric and the parametric tests strongly reject equality between the two states, cautioning against aggregating them in a common "informality state." The parametric model indicates the source of the difference in the high dispersion of informal self-employment income and in the low duration of informal employee jobs.
Subjects: 
labor market frictions
search and matching
informality
self-employment
JEL: 
J46
J64
O17
Document Type: 
Working Paper

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