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Trade, Informal Employment and Labor Adjustment Costs / Arias, Javier
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Arias, Javier
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Economic Theory & Research.
- Informal Economy.
- International Economics & Trade.
- Labor Markets.
- Labor Policies.
- Labor Standards.
- Macroeconomics and Economic Growth.
- Poverty Reduction.
- Trade and Labor Market Interactions.
- Trade Policy.
- Work & Working Conditions.
- Local Subjects:
- Economic Theory & Research.
- Informal Economy.
- International Economics & Trade.
- Labor Markets.
- Labor Policies.
- Labor Standards.
- Macroeconomics and Economic Growth.
- Poverty Reduction.
- Trade and Labor Market Interactions.
- Trade Policy.
- Work & Working Conditions.
- Physical Description:
- 1 online resource (36 pages)
- Place of Publication:
- Washington, D.C., The World Bank, 2013
- System Details:
- data file
- Summary:
- Informal employment is ubiquitous in developing countries, but few studies have estimated workers' switching costs between informal and formal employment. This paper builds on the empirical literature grounded in discrete choice models to estimate these costs. The results suggest that inter-industry labor mobility costs are large, but entry costs into informal employment are significantly lower than the costs of entry in formal employment. Simulations of labor-market adjustments caused by a trade-related fall in manufacturing goods prices indicate that the share of informally employed workers rises after liberalization, but this is due to entry into the labor market by previously idle labor.
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