Private Formal Sector Research Articles

Institutional Design of Pension Systems Versus Labor Market Structure: What Matters Most?

Abstract Since the 1980s, policy makers have favored Defined Contribution (DC) pension systems as the alternative to address the unsustainability of Defined Benefit systems. While DC schemes offer benefits and economic advantages, they also present challenges and limitations. We evaluate the mandatory DC pension system for workers in the private formal sector in Mexico, introduced in 1997. We intend to determine for which workers the design of the system is effective and for which workers it is not. The Mexican labor market has high levels of informality and workers constantly flow in and out of the formal sector. Our findings support the view that workers’ personal characteristics place them in the structure of the labor market that in turn determines pension benefits. We analyze involvement with the formal sector and the pension system and identify 3 groups of pension participants that reflect the structure of the local labor market: occasional workers, frequent interruptions, and workers with high participation rates. We conclude that frictions in the labor market prevail over the good intentions of the pension design, like reducing informality and encouraging saving for retirement. Our results show that the system properly serves only 36% of affiliated workers. We explain why very few workers report behaviors consistent with high participation, and why most affiliates have insufficient participation to receive pension benefits. We shed light on the relationship between the structure of the labor market and the design of the pension system and their impact on workers’ future pension benefits.

Maternity benefits mandate and women’s choice of work in Vietnam

Despite a sizable literature on the labor market effects of maternity leave regulation on women in developed countries, how these policies affect women’s work in developing countries with a large informal sector remains poorly understood. This study examines how extending the maternity leave requirement affects women’s decision to work in the informal or formal sector in Vietnam. We use a difference-in-differences approach to evaluate the 2012 Amendments to the Vietnam Labor Law, which imposes a longer maternity leave requirement than before. We find that the law increases formal employment and decreases unpaid work among women. This is driven by women switching from agricultural household work to employment in the private formal sector, especially in the manufacturing industry and among the middle-skilled occupations such as plant and machine workers, craft and related workers, as well as clerks.

Analisis keputusan wanita bekerja dan kontribusinya pada ekonomi rumah tangga di Kota Jambi

The purpose of this study is to analyze the socio-economic conditions of women, what factors influence the decisions of working women and how much the income contribution of women working towards the household economy. In determining the location of the study, this study used a "multistage sampling" method. Furthermore, proportional sampling will be applied, which is sampling in each region in proportion to the number of samples in each region. This study uses the "Binnary Logistic Regression" model, because the dependent variable is a dummy variable.
 The results of this study indicate that the average length of education of respondents 12 years, the number of dependents 4 people, 52.41 percent of respondents with perceptions of gender equality and 3.5 million/month the average income of respondents' husbands. The regression results show the variable number of dependents and gender instincts has a significant effect on the decision of married women to work. While the education level and husband's income variables did not significantly influence the decision of married women to work. And the biggest contribution is respondents who work in the private formal sector.

What factors Influence Internal migration and Wage Growth? an Empirical Analysis of Private Formal Sector in Bolgatanga-Ghana

The primary aim of this study is to explore the determinants of wage growth velocity in personal formal sector of Bolgatanga Municipality. A primary data collection technique was used and sample size of 345 individuals interviewed using a well structured interview schedule and questionnaire by convenient sampling. Ordinary least square method was applied to study the dependency of growth rate of wage on different variables in Bolgatanga Municipality. Findings reveal that education, gender, experience, household area and marital status of the respondents absolutely affect growth of wages at less than 1% level of significance.

Labor Market Segmentation and the Determination of Wages in the Public, Private-Formal, and Informal Sectors in San José, Costa Rica

A striking feature of many cities in less developed countries (LDCs) is the coexistence of large, well-organized, high-technology firms with the small street vendors who own little but a wooden box to sit on. This apparent dualism in the urban economy has been a concern of students of economic development for many years. Several international agencies, notably the International Labour Organisation (ILO) and the World Bank, have focused attention on this phenomenon. The ILO popularized the terms formal and to describe this dichotomy. To many economists, one consequence of this dualism is labor market segmentation.' Labor market segmentation plays a crucial role in explanations provided for some important issues, such as rural-urban migration, urban poverty, unemployment, underemployment, and growth.2 In this article I examine the hypothesis that labor market segmentation exists in San Jos6, Costa Rica, between the public and private-formal sectors and between the privateformal and informal sectors (defined in the Appendix). I define labor market segmentation as a situation where, because of institutional barriers to occupational mobility between sectors, a worker in the lower sector has less than full access to a job in the upper sector held by an observationally identical worker.3 If there were no barriers, workers in the low wage sector would enter the high wage sector and force the wages in that sector down until wages across sectors were equalized. That is, labor market segmentation implies differences in wages for observationally identical workers. Relying on this inference, most of the empirical literature on labor market segmen-