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Wage differentials and mobility in the urban labour market: a panel data analysis for Mexico

Gong, Xiaodong; van Soest, Arthur

Description

We analyze wage differentials and transitions between the formal and informal sectors in urban Mexico. We use panel data on five quarterly waves from Mexico's Urban Employment Survey. We develop a dynamic random effects panel data model consisting of separate wage equations for the two sectors and a logit part explaining the labour market state with wages included as explanatory variables. The model is estimated using simulated maximum likelihood. The estimates show that wage differentials...[Show more]

dc.contributor.authorGong, Xiaodong
dc.contributor.authorvan Soest, Arthur
dc.date.accessioned2015-12-13T22:30:58Z
dc.identifier.issn0927-5371
dc.identifier.urihttp://hdl.handle.net/1885/75089
dc.description.abstractWe analyze wage differentials and transitions between the formal and informal sectors in urban Mexico. We use panel data on five quarterly waves from Mexico's Urban Employment Survey. We develop a dynamic random effects panel data model consisting of separate wage equations for the two sectors and a logit part explaining the labour market state with wages included as explanatory variables. The model is estimated using simulated maximum likelihood. The estimates show that wage differentials increase with education level. The probability of formal sector employment strongly increases with the wage differential. For male workers, the choice between formal and informal sector is driven by wage differentials and unobserved heterogeneity, and true state dependence is not important. For women, non-participation is the most common labour market state, and true state dependence plays a much larger role.
dc.publisherElsevier
dc.sourceLabour Economics
dc.subjectKeywords: Informal sector; Mexico; Mobility; Panel data; Wage differentials
dc.titleWage differentials and mobility in the urban labour market: a panel data analysis for Mexico
dc.typeJournal article
local.description.notesImported from ARIES
local.description.refereedYes
local.identifier.citationvolume9
dc.date.issued2002
local.identifier.absfor140304 - Panel Data Analysis
local.identifier.absfor140211 - Labour Economics
local.identifier.ariespublicationMigratedxPub4462
local.type.statusPublished Version
local.contributor.affiliationGong, Xiaodong, College of Business and Economics, ANU
local.contributor.affiliationvan Soest, Arthur, RAND Corporation
local.description.embargo2037-12-31
local.bibliographicCitation.issue4
local.bibliographicCitation.startpage513
local.bibliographicCitation.lastpage529
local.identifier.doi10.1016/S0927-5371(02)00045-3
dc.date.updated2015-12-11T08:58:15Z
local.identifier.scopusID2-s2.0-0036348631
CollectionsANU Research Publications

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