Revisiting Informality: Evidence from Employment Characteristics and Job Satisfaction in Chile

Abstract

We use data from a unique, nationally representative survey to investigate the relationship between job satisfaction and employment characteristics in Chile. Consistent with the dualistic models, job protection appears to be a positive determinant of job satisfaction rather than a cost to be avoided by engaging in informal activities. Further, we find self-employed workers to be penalized by the lack of valuable workplace facilities, such as decent toilets and clean water. However, being self-employed does not necessarily mean taking the ‘bad’ jobs. We show that self-employed workers in Chile, like their counterparts in industrialized countries, derive procedural utility from being independent.