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Is Informal Sector Work an Alternative to Workfare Benefits? The Case of Pre‐program Expansion and Economic Crisis
Author(s) -
Khamis Melanie
Publication year - 2012
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/rode.12005
Subject(s) - workfare , economics , work (physics) , unemployment , informal sector , matching (statistics) , propensity score matching , labour economics , macroeconomics , economic growth , welfare , market economy , mechanical engineering , statistics , mathematics , engineering
Limited availability of workfare programs, limited unemployment insurance and a large informal sector are features of the Argentine labor market at the outset of the 2001/02 economic crisis. This paper tests the hypothesis whether informal work is an alternative to workfare participation before a large‐scale program expansion took place. Results from the propensity score matching indicate that observable characteristics of informal low‐income workers and current workfare participants are significantly different. However, within these groups, it is possible to identify subgroups with similar observable characteristics. This indicates that only a subset of the individuals sees workfare and informal work as substitutable alternatives.