Informal work along the business cycle: evidence from Argentina

	Formal	Informal
Gender
Male	57.48(a)	50.49
Female	42.52	49.51
Age
to 24 years	8.24	26.71
to 54 years	79.58	64.54
to 64 years	12.18	8.75
Education
Primary school and less	14.34	30.07(b)
Marital status
Married or common-law couples	65.23	47.15
Widowed, divorced, separated	8.19	8.39
Single	26.58	44.46
Job
Weekly hours	40.50	35.64
Formality premium	1.38(c)

Source: EPH, 2003–2020.

(a) A total of 57.48% of workers in formal employment are male.

(b) A total of 30.07% of workers in informal employment are low-educated (educational attainment in primary school and less).

Labor market stocks in Argentina, in% of the working-age population.
*Source*: Argentine Household Survey, 2003Q3-2020Q1, and authors’ calculation. Stocks are expressed as a percentage of the working-age population. Notice that U refers here to unemployed workers as a% of the working-age population while Figure 1 displays the unemployment rate. Shaded areas denote recession periods based on the Argentine Central Bank (BCRA) calculations.

Table 2

Average quarterly transition probabilities (in%)

State t + 1	F	I	U	N
Statet
F	2*91.49	2*4.72	2*1.31	2*2.48
I	2*10.16	2*69.16	2*6.42(a)	2*14.26
U	2*6.74	2*23.69(b)	2*35.53	2*34.04
N	2*1.82	2*7.74	2*5.34	2*85.10

“F,” “I,” “U,” and “N” indicate formal employment, informal employment, unemployment, and nonparticipation, respectively.

Source: Encuesta Permanente de Hogares 2003Q3-2020Q1 and authors’ calculation.

(a) Each quarter, 6.42% of informal workers lose their jobs.

(b) Each quarter, 23.69% of unemployed workers find a job in the informal sector.

Average worker flows, 2003Q3-2020Q1.
*Source*: Argentine Household Survey, authors’ calculation. Worker transitions are expressed as the total number of people in thousands. For example, each quarter, out of the 1.6 million unemployed workers, 107,000 find a formal job, 377,000 find an informal job, and 541,000 leave the labor force.

Table 3

Variance Decomposition based on b in%. 2003Q3-2020Q1

	Unemployment	Informality
	(1)	(2)
FI	3.08	20.28
FU	0.56	−0.86
FN	5.66	16.92
IF	2.58	44.27(b)
IU	25.38	−12.75
IN	−1.00	4.68
UF	5.58	8.11
UI	13.99(a)	−1.18
UN	17.08	0.95
NF	−1.01	2.32
NI	−1.33	14.27
NU	29.43	2.99
IU and UI	39.37	−0.23
NU and UN	46.51	3.94
FI and IF	5.67	64.55

“F,” “I,” “U,” and “N” indicate formal employment, informal employment, unemployment, and nonparticipation, respectively.

“unemployment”: b decomposition of changes in the unemployment rate. “informality”: b decomposition of changes in the share of informal work in total employment.

(b) Changes in IF account for 44.27% of fluctuations in share of informal work in total employment.

(a) Changes in UI account for 13.99% of fluctuations in the unemployment rate.

Transition probabilities in%.
“F,” “I,” “U,” and “N” indicate formal employment, informal employment, unemployment, and nonparticipation, respectively. For example, “ F→I ”: the transition from formal to informal work. Shaded areas denote recession periods based on the Argentine Central Bank (BCRA) calculations.

Stocks: Male versus female.
*Source*: Argentine Household Survey. Panels A, B, C, and D: stocks as% of the working-age population. Shaded areas denote recession periods based on the Argentine Central Bank (BCRA) calculations.

Transition probabilities - Male versus Female in%.
*Source*: Argentine Household Survey. The solid black lines are the transitions for men and the dashed blue are those for women. “F,” “I,” “U,” and “N” indicate formal employment, informal employment, unemployment, and nonparticipation, respectively. For example, “F→I”: the transition from formal to informal work. Shaded areas denote recession periods based on the Argentine Central Bank (BCRA) calculations.

Table 4

Variance decomposition by gender based on β

	Unemployment rate		Informality rate
	Men	Women	Men	Women
	(1)	(2)	(3)	(4)
FI	3.48	1.83	14.88	18.49
FU	8.44	−2.06	12.41	2.34
FN	3.48	4.76	10.42	10.60
IF	0.24	2.99	43.20(b)	46.40
IU	24.18	24.69(a)	−16.48	−11.43
IN	0.25	−3.82	13.52	3.37
UF	5.88	8.57	12.42	4.77
UI	16.68	11.66	4.22	−0.71
UN	19.07	7.16	0.77	−0.79
NF	0.59	−0.37	1.17	6.34
NI	1.13	−2.44	−0.32	19.16
NU	16.57	47.03	3.78	1.47
IU and UI	40.86	36.35	16.64	4.06
NU and UN	35.65	54.19	4.55	0.68
FI and IF	3.72	4.83	58.09	64.89

“F,” “I,” “U,” and “N” indicate formal employment, informal employment, unemployment, and nonparticipation, respectively.

“unemployment”: b decomposition of changes in the unemployment rate.

“informality”: b decomposition of changes in the share of informal work in total employment.

(b) Changes in IF account for 43.20% of fluctuations in share of informal work in total male employment.

(a) Changes in IU account for 24.69% of fluctuations in the female unemployment rate.

References

Authors

Metrics

Articles in this issue

DOI: https://doi.org/10.2478/izajodm-2020-0019 | Journal eISSN: 2520-1786

Journal RSS Feed

Language: English

Published on: Nov 19, 2020

Published by: Sciendo

In partnership with: Paradigm Publishing Services

Keywords:

JEL:

E24,

E26,

Related subjects:

Business and economics,

Mathematics and statistics for economists,

Econometrics

© 2020 Julien Albertini, Arthur Poirier, Thepthida Sopraseuth, published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 License.

Volume 11 (2020): Issue 1 (January 2020)

Informal work along the business cycle: evidence from Argentina

Figures & Tables

Figure 1

Table 1

Figure 2

Table 2

Figure 3

Table 3

Figure 4

Figure 5

Figure 6

Table 4

Paradigm

My account