Abstract
This study investigates the factors influencing formal and informal labour market in Asmara, the capital city of Eritrea. The findings reveal that variables such as age, gender, education and birth place influence formal and informal labor market of the city. The chances for young people getting jobs in formal are low relative to older people. Higher educational level is related to securing jobs in the formal sector. Regarding gender males have more chances in the formal sector than females. People from Maekel/Central Region (townships surrounding Asmara) have higher chances to engage in self-employment. Generally, the results reveal that the labor market in Asmara show varied characteristics.
Highlights
1.1 Background and Empirical LiteratureAs far as, urban labor markets in developing countries are concerned, it is generally classified as formal and an informal sector (Pradhan and van Soest, 1995)
According to (OECD, 2009), informal sector was mainly considered as characteristics of developing countries and it was assumed that it would disappear as these countries economy develops
The question that is central at formal or informal work is whether individuals choose to work in the informal sector or they opt to work in the sector as the only alternative at their disposal
Summary
1.1 Background and Empirical LiteratureAs far as, urban labor markets in developing countries are concerned, it is generally classified as formal and an informal sector (Pradhan and van Soest, 1995). The question that is central at formal or informal work is whether individuals choose to work in the informal sector or they opt to work in the sector as the only alternative at their disposal. The former considers employment in the informal sector to be supply-led and voluntary (Heckman and Sedlacek 1985; Malony 2004; Packard 2007); while the latter views informal work as a secondary market where all those without access to the primary formal market find themselves (Fields, 1990)
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