MetaTOC stay on top of your field, easily

Labor Informality: Choice or Sign of Segmentation? A Quantile Regression Approach at the Regional Level for Colombia

Review of Development Economics

Published online on


The labor market in developing countries is remarkably heterogeneous, with a small productive formal sector characterized by high wages and attractive employment conditions, and a large informal sector characterized by low productivity and volatile wages. The informal sector is particularly diverse. In this paper, we examine the heterogeneity of the informal sector at the regional level in Colombia. In general, our findings suggest that both voluntary and involuntary informal employment co‐exist by choice and as a consequence of labor market segmentation. We also find that there are striking differences in labor market characteristics across cities, particularly with respect to informal employment.