Caracteristicas individuales y estructurales de la informalidad en Lima Norte

Using ELHO (PROPOLI/OSEL) and ENAHO (MPTE) data for 2005 we describe the characteristics of informality at individual and family level in both Lima Norte and the Metropolitan area as a whole. In order to measure the effects of informality on earnings we test both an OLS regression model and a treatment-effects model, to understand how the fact of being informal influences earnings. We find that there are two channels through which low educational levels affect earning: the first augmenting the probability to be informal (or to find an informal job), the second directly influencing earnings once treated the effects of informality. As a consequence, the “mincerian” coefficient becomes significantly lower than in the great majority of studies in literature. We find that individual characteristics that conduct to informality are very important to define earnings, in particular for independent workers.