Informal Employment in a Growing and Globalizing Low-Income Country
American Economic Review · 2015 · Volume 105 · Issue 5
Abstract
We document several facts about workforce transitions from the informal to the formal sector in Vietnam, a fast growing, industrializing, and low-income country. First, younger workers, particularly migrants, are more likely to work in the formal sector and stay there permanently. Second, the decline in the aggregate share of informal employment occurs through changes between and within birth cohorts. Third, younger, educated, male, and urban workers are more likely to switch to the formal sector than other workers initially in the informal sector. Poorly educated, older, female, rural workers face little prospect of formalization. Fourth, formalization coincides with occupational upgrading.
Keywords
Informal Economy, Underground Economy, Economic Impacts of Globalization: Labor, Economics of Gender, Non-labor Discrimination, Informal Labor Markets, Economic Development: Human Resources, Human Development, Income Distribution, Migration, Socialist Systems and Transitional Economies: Factor and Product Markets, Industry Studies, Population, Socialist Institutions and Their Transitions: Consumer Economics, Health, Education and Training: Welfare, Income, Wealth, and Poverty
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