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IR13-005_HerreraIdarraga.pdf (710.27 KB)

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Working paper

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2013

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cc-by-nc-nd, (c) Herrera-Idárraga et al., 2013
Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/57609

Informality and Overeducation in the Labor Market of a Developing Country

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Abstract

In this paper, we explore the connection between labor market segmentation in two sectors, a modern protected formal sector and a traditionalunprotected-informal sector, and overeducation in a developing country. Informality is thought to have negative consequences, primarily through poorer working conditions, lack of social security, as well as low levels of productivity throughout the economy. This paper considers an aspect that has not been previously addressed, namely the fact that informality might also affect the way workers match their actual education with that required performing their job. We use micro-data from Colombia to test the relationship between overeducation and informality. Empirical results suggest that, once the endogeneity of employment choice has been accounted for, formal male workers are less likely to be overeducated. Interestingly, the propensity of being overeducated among women does not seem to be closely related to the sector choice.

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Mercat de treball, Recursos humans, Igualtat retributiva, Desenvolupament econòmic

Subject (English)

Labor market, Human capital, Pay equity, Economic development

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Documents de treball (Institut de Recerca en Economia Aplicada Regional i Pública (IREA))
AQR (Grup d’Anàlisi Quantitativa Regional) – Working Papers
Documents de treball / Informes (Econometria, Estadística i Economia Aplicada)

Citation

HERRERA-IDÁRRAGA, Paula, LÓPEZ-BAZO, Enrique and MOTELLÓN CORRAL, Elisabet. Informality and Overeducation in the Labor Market of a Developing Country. IREA – Working Papers. 2013. Vol.  IR13/05. ISSN 2014-1254. [consulted: 10 of August of 2026]. Available at: https://hdl.handle.net/2445/57609

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