On defining and measuring the informal sector

A range of alternative empirical definitions of informal activity have been employed in the literature. Choice of definition is often dictated by data availability. Different definitions may imply very different conceptual understandings of informality. In this paper the authors investigate the degree of congruence between three definitions of informality based on employment contract registration, social security protection, and the characteristics of the employer and employment using Brazilian household survey data for the period 1992 to 2001. The authors present evidence showing that 64 percent of the economically active population are informal according to at least one definition, but only 40 percent are informal according to all three. Steady compositional changes have been taking place among informal workers, conditional on definition. The econometric analysis reveals that the conditional impact of particular factors (demographic, educational attainment, and family circumstances) on the likelihood of informality varies considerably from one definition to another. The results suggest growing heterogeneity within the informal sector. Therefore, the authors argue that informal activity may be as much associated with entrepreneurial dynamism as with any desire to avoid costly contract registration and social protection. However, the authors confirm there is no a priori reason for entrepreneurial activity to be unprotected. Consequently definitions of informality based on occupation and employer size seem the most arbitrary in practice even if conceptually well-founded.Labor Markets,Labor Standards,Work&Working Conditions,Labor Management and Relations,Tertiary Education

A flying start? Long term consequences of maternal time investments in children during their first year of life

We study the impact of increasing the time that the mother spends with her child in the first year of her life. In particular, we examine a reform that increased paid and unpaid maternity leave entitlements in Norway. In response to this reform, maternal leave increased on average by 4 months and family income was unaffected. We find that this increase in maternal time with the child led to a 2.7 percentage points decline in high school dropout rates, going up to 5.2 percentage points for those whose mothers have less than 10 years of education. This effect is especially large for children of mothers who, in the absence of the reform, would take very low levels of unpaid leave. Finally, there is a weak impact on college attendance. The results also suggest that much of the impact of early time with the child is at low levels of maternal education.

Human capital and earnings inequality in Brazil, 1988-98 : quantile regression evidence

The authors undertake an empirical examination of rates of return to human capital for men in Brazil, through the period of macroeconomic stabilization and trade liberalization, using data from the 1988, 1992, and 1998 Brazilian household surveys (Pesquisa Nacional por Amostra de Domic?os, PNAD). The authors estimate simultaneous quantile equations to gain an insight on the impact of human capital on wages across the hourly earnings distribution. They conclude that there is evidence of growing inequality in rates of return to education in Brazil. But the authors find evidence that education is no longer used as a screening device in the labor market, but rather rewarded for its innate association with higher productivity. Although increases in rates of return to education have been more pronounced at the top of the earnings distribution, this has not led to increased inequality. This is because the levels of education and other labor market-rewarded endowments have increased and offset the rate of return effect.Public Health Promotion,Decentralization,Health Monitoring&Evaluation,Curriculum&Instruction,Teaching and Learning,Economic Theory&Research,Fiscal&Monetary Policy,Curriculum&Instruction,Teaching and Learning,Health Monitoring&Evaluation

Gender wage differentials in Brazil : trends over a turbulent era

Since the late 1980s, macroeconomic and trade reform in Brazil appears to have been accompanied by a substantial improvement in the position of women compared with men in the labor market, despite only modest changes to labor market institutions. The authors examine movements in the gender wage gap from 1988 to 1998. Their findings indicate that, over this period, the gender wage gap fell mainly because of reduced discrimination against women. But the authors find evidence to suggest that, more recently, since the elimination of high inflation, human capital investments and other earnings-related enhancements have begun to improve women's condition.Public Health Promotion,Anthropology,Health Monitoring&Evaluation,Gender and Development,Population&Development,Anthropology,Agricultural Knowledge&Information Systems,Environmental Economics&Policies,Health Monitoring&Evaluation,Population&Development

A Flying Start? Long Term Consequences of Maternal Time Investments in Children During Their First Year of Life

We study the impact on children of increasing the time that the mother spends with her child in the first year by exploiting a reform that increased paid and unpaid maternity leave in Norway. The reform increased maternal leave on average by 4 months and family income was unaffected. The increased time with the child led to a 2.7 percentage points decline in high school dropout. For mothers with low education we find a 5.2 percentage points decline. The effect is also especially large for children of mothers who, prior to the reform, would take very low levels of unpaid leave.adult outcomes, time with mother, maternity leave

A Flying Start? Maternity Leave Benefits and Long Run Outcomes of Children

We study the impact on children of increasing maternity leave benefits using a reform that increased paid and unpaid maternity leave in Norway in July 1977. Mothers giving birth before this date were eligible only for 12 weeks of unpaid leave, while those giving birth after were entitled to 4 months of paid leave and 12 months of unpaid leave. This increased time with the child led to a 2.7 percentage points decline in high school dropout and a 5% increase in wages at age 30. For mothers with low education we find a 5.2 percentage points decline in high school dropout and an 8% increase in wages at age 30. The effect is especially large for children of those mothers who, prior to the reform, would take very low levels of unpaid leave.maternity leave, children's outcomes

Quasi-Topological Field Theories in Two Dimensions as Soluble Models

We study a class of lattice field theories in two dimensions that includes gauge theories. Given a two dimensional orientable surface of genus $g$, the partition function $Z$ is defined for a triangulation consisting of $n$ triangles of area $\epsilon$. The reason these models are called quasi-topological is that $Z$ depends on $g$, $n$ and $\epsilon$ but not on the details of the triangulation. They are also soluble in the sense that the computation of their partition functions can be reduced to a soluble one dimensional problem. We show that the continuum limit is well defined if the model approaches a topological field theory in the zero area limit, i.e., $\epsilon \to 0$ with finite $n$. We also show that the universality classes of such quasi-topological lattice field theories can be easily classified. Yang-Mills and generalized Yang-Mills theories appear as particular examples of such continuum limits.Comment: 23 pages, 16 figures, uses psbox.te

Does Inflation Targeting Matter for Output Growth? Evidence from Industrial and Emerging Economies

This paper examines the effects of inflation targeting on industrial and emerging economies' output growth over the "globalization years" of 1986-2004. Controlling for trade openness and two indicators of financial globalization, the authors find systematic positive and significant effects of inflation targeting on real output growth. In dynamic models, the findings show strong output persistence in industrial economies, in which partial and full inflation targeting regimes have a positive long-run impact on growth. In emerging markets, only full inflation targeting policies have any output effect in the long-run. The results suggest that strict inflation targeting is needed to make the discipline effect of the disinflation process outweigh the output costs of promoting high interest rates to attract capital flows in a global world. These findings are robust to the treatment of endogenous globalization measures.Economic Growth; Globalization; Inflation Targeting; Panel Data Methods