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Is there an informal employment wage penalty? Evidence from South Africa
Author(s)
Date Issued
2008-04
Date Available
2008-05-30T16:28:47Z
Abstract
We estimate the wage penalty associated with working in the South African informal sector. To this end we use a rich data set on non-self employed males that allows one to accurately distinguish workers employed in the informal sector from those employed in the formal sector and link individuals over time. Implementing various econometric approaches we find that there is a gross wage penalty of a little over 18 per cent for working in the informal sector. However, once we reduce our sample to a group for which we can reasonably calculate
earnings net of taxes and control for time invariant unobservables the wage penalty
disappears.
earnings net of taxes and control for time invariant unobservables the wage penalty
disappears.
Type of Material
Journal Article
Publisher
University of Chicago Press
Journal
Economic Development and Cultural Change
Volume
56
Issue
3
Start Page
683
End Page
710
Copyright (Published Version)
Copyright 2008 by The University of Chicago
Classification
J31
O17
Subject – LCSH
Informal sector (Economics)--South Africa
Wages--South Africa
Web versions
Language
English
Status of Item
Peer reviewed
ISSN
0013-0079
This item is made available under a Creative Commons License
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walshf_article_pub_012.pdf
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225.99 KB
Format
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