Immigration, Wages and Employment under Informal Labor Markets

Mapping Intimacies ◽

10.31235/osf.io/acr4v ◽

2021 ◽

Author(s):

Lukas Delgado-Prieto

Keyword(s):

Labor Markets ◽

Formal Sector ◽

Informal Workers ◽

Informal Labor ◽

Wage Effect ◽

Wage Effects ◽

Market Impacts ◽

Negative Effect ◽

Informal Labor Markets ◽

High Degree

This paper studies the labor market impacts of a massive inflow of Venezuelans in Colombia. By comparing areas that received different shares of migrants, I find a negative effect on wages and on local employment for natives. The negative wage effect is driven by a large drop of wages in the informal sector, where migrants are mostly employed, while the negative employment effect is driven by a reduction of employment in the formal sector, where the minimum wage is binding. To explain these results, I develop a model in which firms hire formal and informal workers with different costs. If these workers have a high degree of substitutability, and wages for formal workers are rigid, firms reallocate formal to informal employment as a response to lower informal wages. In settings with informal labor markets migration can therefore lead to asymmetric employment and wage effects across the informal and formal sectors.

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How do immigrant legalization programs play out in informal labor markets? The case of Senegalese street hawkers in Argentina

Migration Studies ◽

10.1093/migration/mnz044 ◽

2019 ◽

Cited By ~ 1

Author(s):

Luisa Feline Freier ◽

Bernarda Zubrzycki

Keyword(s):

Labor Markets ◽

Legal Status ◽

Experimental Situation ◽

Well Being ◽

Subjective Well Being ◽

Formal Sector ◽

Subjective Expectations ◽

Informal Labor ◽

Informal Labor Markets ◽

The Impact

Abstract In this article, we take advantage of the quasi-experimental situation of the 2013 legalization program for Senegalese citizens in Argentina to study its effects on immigrant street hawkers’ incorporation into the formal labor market, their working conditions, social integration, and collective mobilization. In order to understand the impact of legalization programs, it is important to acknowledge that in informal labor markets, the effects of amnesties are likely less pronounced than in predominantly formal markets. Furthermore, the scope of socioeconomic rights granted to unauthorized migrants and migrants’ subjective expectations and aspirations need to be taken into consideration. Based on 50 in-depth interviews and a small N survey, our study suggests that the legalization effect on Senegalese street hawkers’ access to the formal sector is limited. However, legal status does benefit migrants’ subjective well-being and their disposition to engage in collective action for labor and human rights.

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Social Security Enrollment as an Indicator of State Fragility and Legitimacy: A Field Experiment in Maghreb Countries

Social Sciences ◽

10.3390/socsci10070266 ◽

2021 ◽

Vol 10 (7) ◽

pp. 266

Author(s):

Walid Merouani ◽

Claire El Moudden ◽

Nacer Eddine Hammouda

Keyword(s):

Labor Market ◽

Social Security ◽

Social Insurance ◽

Discrete Choice Models ◽

Formal Sector ◽

Social Security Systems ◽

State Fragility ◽

Informal Workers ◽

Informal Labor ◽

State Legitimacy

State legitimacy and effectiveness can be observed in the state’s approach to delivering welfare to citizens, thus mitigating social grievances and avoiding conflicts. Social security systems in the Maghreb countries are relatively similar in their architecture and aim to provide social insurance to all the workers in the labor market. However, they suffer from the same main problem: a low rate of enrollment of workers. Many workers (employees and self-employed) work informally without any social security coverage. The issue of whether informal jobs are chosen voluntarily by workers or as a strategy of last resort is controversial. Many authors recognize that the informal sector is heterogeneous and assume that it is made up of (1) workers who voluntarily choose it, and (2) others who are pushed into it because of entry barriers to the formal sector. The former assumption tells us much about state legitimacy/attractiveness, and the latter is used to inform state effectiveness in delivering welfare. Using the Sahwa survey and discrete choice models, this article confirms the heterogeneity of the informal labor market in three Maghreb countries: Algeria, Morocco, and Tunisia. Furthermore, this article highlights the profiles of workers who voluntarily choose informality, an aspect that is missing from previous studies. Finally, this article proposes policy recommendations in order to extend social security to informal workers and to include them in the formal labor market.

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