Abstract
In this paper, we analyze the determinants of formal vs. informal employment choice and gender wage differentials in Algeria. Using the Algerian national consumption survey, we estimate wage equations with correction of selection bias based on switching regression model. The results show that women are systematically underpaid in all sectors especially in the Informal sector. However, the public sector is the one that best protects women from wage discrimination. The returns to education are generally higher in the public and formal sector for both men and women. Regional characteristics influence the choice of the sector and partly explain the wage gap between men and women. Finally, the choice of working in the public sector versus working as informal employees is mainly due to the pattern of wages. However, the financial benefit is not a motivation for choosing the public sector compared to self-employment. This result suggests that there should be a non-monetary benefit that influences the choice of the public sector in Algeria.
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Article Details
- Year: 2021
- Volume: 42
- Issue: 1
- Pages: 143 - 170
- Accepted: 04.01.2021
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DOI:
https://doi.org/10.5281/zenodo.16925252 -
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How to Cite?
Moundir Lassassi (2021). Formal VS Informal Sector Choice and Wage Differentials in Algeria. Journal of Economic Cooperation and Development, 42(1), 143-170. https://doi.org/10.5281/zenodo.16925252
