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Profesores Principal
Raquel Bernal
The Informal Labor Market in Colombia: Identification and Characterization

In this paper, we study the extent and nature of employment informality in Colombia by using a new chapter on informality in the Encuesta Continua de Hogares (ECH) from August 2006 to December 2006. This chapter includes new questions deepening the information on coverage of social protection benefits, labor market trajectories, and motivations for sector of employment. Crucially, the availability of these new data allows us to measure informality in several ways and understand the differences and implications of using various definitions.


We then study the nature of informality in Colombia. In particular, we characterize informal workers in various dimensions that include socio-demographic characteristics, characteristics of the firm and job satisfaction measures. The main objective is to understand what types of individuals belong to formal and informal sectors, study the incentives and motivations of workers for belonging to one or other segment of the labor market (broadly defined in terms of informality), and analyze the consequences of not being covered by the regulatory framework. In doing this, we hope to gain some understanding about how different policy interventions could influence individuals’ occupation choices and workers’ well-being.