Poverty and labor informality in Colombia

Roberto Mauricio Sánchez Torres

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Poverty and labor informality in Colombia

Roberto Mauricio Sánchez Torres

| 30 lip 2020

IZA Journal of Labor Policy

Tom 10 (2020): Zeszyt 1 (March 2020)

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Data publikacji: 30 lip 2020

Zakres stron: -

DOI: https://doi.org/10.2478/izajolp-2020-0006

Słowa kluczowe
poverty, Colombia, labor informality, earnings gaps, selection bias

© 2020 Roberto Mauricio Sánchez Torres, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Poverty and informality in Latin American countries.Source: Data from the Economic Commission for Latin America and the Caribbean (2014b).Notes: 1. The y-axis is analyzed based on monetary poverty in urban areas. 2. The informality rate is the percentage of workers who are working in the informal sector.

Poverty and informality in Colombia during the period 2002–2013.Source: Integrated Household Survey (NADS, 2014).

Changes in poverty indicators and informality rate in Colombia during 2002–2013.Source: Integrated Household Survey (NADS, 2014).Notes: Index for every indicator. 2002=100.

Distribution of log monthly labor income by informality.Source: Integrated Household Survey (NADS, 2014).Notes: 1. The graphs illustrate density functions estimated by kernel methodology.2. The estimated kernel is the Epanechnikov kernel with optimal bandwidth.

Distribution of log hourly labor income by informality.Source: Integrated Household Survey. (NADS, 2014).Notes: 1. The graphs illustrate density functions estimated by kernel methodology.2. The estimated kernel is the Epanechnikov kernel with optimal bandwidth.

Continuous formalization and poverty indicators in Colombia.Source: Integrated Household Survey. (NADS, 2014).Note: Data were estimated considering monthly income and informal employment.

Average individual earnings gaps by informality type in Colombia, 2002–2013

Informality	Labor income	2002	2005	2008	2013
Informal sector	Monthly income	35.7	32.8	40.5	42.3
	Hourly income	30.4	28.6	36.6	37.6

Informal employment	Monthly income	40.9	38.9	44.0	43.6
	Hourly income	36.2	34.2	39.8	39.1

Informal employment and employment in the informal sector in Colombia, 2013

Employment in the informal Sector: 57.5			Occupational position
Informal employment: 59.6			Own account workers	Employers	Unpaid workers		Wage-earning workers
					Formal	Informal	Formal	Informal

			1	2	3	4	5	6
Economic Establishment	Formal sector (establishment with more than 5 employees)	A	4.4 (719640)	1.5 (243867)		0.2 (28405)	30.8 (5015828)	5.4 (891832)
	Informal sector (establishment with 5 or fewer employees)	B	36.3 (5913077)	3.2 (524612)	0.5 (78009)	2.7 (448819)	2.1 (348184)	8.1 (1327603)
	Households hiring domestic workers	C					0.9 (155388)	3.7 (602247)

Average earnings by occupational position and informality

Category	Average monthly labor income¹	% total average	Average hourly labor income	% total average
Own-account workers in the informal sector	508,250	54	3,450	61
Own-account workers in the formal sector	1,834,812	194	12,427	221
Employers in the informal sector	1,355,576	143	7,109	126
Employers in the formal sector	3,492,591	369	20,162	358
Formal employees in the formal sector	1,638,424	173	9,020	160
Informal employees in the formal sector	691,276	73	4,098	73
Formal employees in the informal sector	909,387	96	4,677	83
Informal employees in the informal sector	507,253	54	3,269	58
Total average	947,549	100	5,633	100

Effects of changes in informality on poverty indicators in Colombia, 2002-2013. Monthly labor income

Period	Informality	Kind of effect		Headcount ratio		Gap		Severity
				Change in indicator	% total change	Change in indicator	% total change	Change in indicator	% total change
2002-2005	Informal	Change explained by	Earnings gap	-0.5	10.8	-0.3	9.9	-0.2	8.7
	sector	informality	Informality rate	-0.5	12.0	-0.3	9.9	-0.2	9.2
		Change not explained by informality		-3.3	77.2	-2.3	80.1	-1.7	82.1
		Total change		-4.3	100.0	-2.8	100.0	-2.1	100.0
	Informal	Change explained by	Earnings gap	-0.5	11.5	-0.2	8.5	-0.2	7.8
	employment	informality	Informality rate	-0.8	17.9	-0.4	14.9	-0.2	11.7
		Change not explained by informality		-3.3	70.6	-2.2	76.6	-1.7	80.6
		Total change		-4.7	100.0	-2.8	100.0	-2.1	100.0
2008-2013	Informal	Change explained by	Earnings gap	0.4	-4.0	0.2	-3.9	0.1	-3.7
	Sector	informality	iInformality rate	-0.1	1.0	-0.1	1.1	0.0	1.2
		Change not explained by informality		-10.6	103.0	-5.5	102.8	-3.3	102.5
		Total change		-10.3	100.0	-5.3	100.0	-3.2	100.0
	Informal	Change explained by	Earnings gap	0.3	-2.6	0.1	-2.1	0.1	-1.8
	employment	informality	Informality rate	-0.3	2.5	-0.1	2.2	-0.1	2.1
		Change not explained by informality		-10.1	100.1	-5.3	99.8	-3.3	99.7
		Total change		-10.1	100.0	-5.3	100.0	-3.3	100.0

Workers by informality type and poverty

Type of informality	Formal/informal	Poor	Not poor	Total
Informal sector	Employment in the informal sector	15.8	41.7	57.5
	Employment in the formal sector	2.5	40.0	42.5
	Total	18.3	81.7	100.0

Informal employment	Informal employment	16.5	43.1	59.6
	Formal employment	1.8	38.6	40.4
	Total	18.3	81.7	100.0

Formalization effect on poverty indicators in Colombia, 2013

Informality	Income	Change in indicators	Head count ratio	Gap	Severity
Informal sector	Monthly	Change in indicator	−11.2	−4.8	−2.6
	income	Change in percentage	−40.0%	−47.1%	−49.0%
	Hourly	Change in indicator	−10.1	−4.4	−2.4
	income	Change in percentage	−33.7%	−37.0%	−35.2%

Informal employment	Monthly	Change in indicator	−12.7	−5.3	−2.8
	income	Change in percentage	−44.5%	−51.0%	−52.3%
	Hourly	Change in indicator	−11.6	−4.6	−2.4
	income	Change in percentage	−41.3%	−45.9%	−46.4%

eISSN:: 2193-9004
Język:: Angielski

Częstotliwość wydawania:: Volume Open
Dziedziny czasopisma:: Business and Economics, Political Economics, Microeconomics, Macroecomics, Economic Policy, Mathematics and Statistics for Economists, Econometrics

Kanał RSS czasopisma

Poverty and labor informality in Colombia

Data publikacji: 30 lip 2020

Zakres stron: -

DOI: https://doi.org/10.2478/izajolp-2020-0006

Słowa kluczowe
poverty, Colombia, labor informality, earnings gaps, selection bias

© 2020 Roberto Mauricio Sánchez Torres, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Figure 1

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Figure 6

Average individual earnings gaps by informality type in Colombia, 2002–2013

Informal employment and employment in the informal sector in Colombia, 2013

Average earnings by occupational position and informality

Effects of changes in informality on poverty indicators in Colombia, 2002-2013. Monthly labor income

Workers by informality type and poverty

Formalization effect on poverty indicators in Colombia, 2013

Poverty and labor informality in Colombia

Data publikacji: 30 lip 2020

Zakres stron: -

DOI: https://doi.org/10.2478/izajolp-2020-0006

Słowa kluczowepoverty, Colombia, labor informality, earnings gaps, selection bias

© 2020 Roberto Mauricio Sánchez Torres, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Figure 1

Figure 2

Figure 3

Figure 4

Figure 5

Figure 6

Average individual earnings gaps by informality type in Colombia, 2002–2013

Informal employment and employment in the informal sector in Colombia, 2013

Average earnings by occupational position and informality

Effects of changes in informality on poverty indicators in Colombia, 2002-2013. Monthly labor income

Workers by informality type and poverty

Formalization effect on poverty indicators in Colombia, 2013

Słowa kluczowe
poverty, Colombia, labor informality, earnings gaps, selection bias