Namazie, Ceema Zahra (2003) The effect of unobservables on labour supply decisions: the formal and informal sector during transition. CASEpaper, 72. Centre for Analysis of Social Exclusion, London School of Economics and Political Science, London, UK.
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Abstract
The transition from a command economy in the FSU resulted in increased activities in the informal sector. However despite prevalent delays in wage payments many workers were still observed to be working full-time in the formal sector. Here a model of workers' labour supply decisions incorporates unobservable features of informal activities in both sectors; namely unofficial payments within the formal sector and stigma associated with the informal sector. These extensions result in non-trivial changes to workers' reservation wage conditions and reconcile the unexpected outcomes of workers' labour supply decisions. A limited empirical analysis of Kyrgyz data, for 1993 and 1996, provides support for the implications of this framework.
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | http://sticerd.lse.ac.uk/case |
| Additional Information: | © 2003 Ceema Zahra Namazie |
| Uncontrolled Keywords: | transition; informal activities; labour supply decisions |
| Library of Congress subject classification: | H Social Sciences > HD Industries. Land use. Labor |
| Journal of Economic Literature Classification System: | P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P23 - Factor and Product Markets; Industry Studies; Population J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J22 - Time Allocation and Labor Supply |
| Sets: | Collections > Economists Online Research centres and groups > Centre for Analysis of Social Exclusion (CASE) |
| Rights: | http://www.lse.ac.uk/library/rights/LSERO.htm |
| Identification Number: | 72 |
| URL: | http://eprints.lse.ac.uk/6329/ |
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