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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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)|
|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
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