Abstract

MORA, Jhon James  and  MURO, Juan. Informality and minimum wages by cohort in Colombia. Cuad. Econ. [online]. 2014, vol.33, n.63, pp.469-486. ISSN 0121-4772.  https://doi.org/10.15446/cuad.econ.v33n63.45342.

This article aims to analyze the effect of minimum wage levels on the decision to join the informal job sector. We estimated a pseudo panel model of engagement in the informal sector using an IV-probit. Our results show that an increased wage gap-the relative difference between observed and minimum wage-has not only a disincentive effect on the probability of joining informality, but also leads to a substitution effect between younger and older cohorts.

Keywords : Informality; minimum wages; instrumental variable probit; pseudo panel; sample selection bias.

        · abstract in Spanish | French | Portuguese     · text in English     · English ( pdf )