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Sectoral Selection and Informality: a Nicaraguan Case Study
Author(s) -
Pisani Michael J.,
Pagán José A.
Publication year - 2004
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/j.1467-9361.2004.00251.x
Subject(s) - informal sector , microdata (statistics) , attractiveness , primary sector of the economy , economics , selection (genetic algorithm) , formal education , labour economics , economic sector , demographic economics , economic growth , economy , sociology , psychology , population , pedagogy , demography , artificial intelligence , computer science , psychoanalysis , census
Using microdata from the 1998 and 1993 Nicaraguan Living Standards Measurement Survey, this paper analyzes the relative size and attractiveness of formal and informal sector employment. Switching regression models of the formal/informal sector employment choice indicate that education across years and gender are the primary determinants of formal sector participation. Furthermore, the formal sector is characterized by positive selection. The results for the informal sector are less definitive, but are also suggestive of positive selection. These findings imply that the informal and formal sectors in Nicaragua contribute positively to the overall economy by attracting those individuals best suited for (in)formal sector employment.