NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Informal Employment in a Growing and Globalizing Low-income Country

Brian McCaig, Nina Pavcnik

NBER Working Paper No. 20891
Issued in January 2015
NBER Program(s):Development Economics, International Trade and Investment

We document several facts about workforce transitions from the informal to the formal sector in Vietnam, a fast growing, industrializing, and low-income country. First, younger workers, particularly migrants, are more likely to work in the formal sector and stay there permanently. Second, the decline in the aggregate share of informal employment occurs through changes between and within birth cohorts. Third, younger, educated, male, and urban workers are more likely to switch to the formal sector than other workers initially in the informal sector. Poorly educated, older, female, rural workers face little prospect of formalization. Fourth, formalization coincides with occupational upgrading.

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Document Object Identifier (DOI): 10.3386/w20891

Published: Brian McCaig & Nina Pavcnik, 2015. "Informal Employment in a Growing and Globalizing Low-Income Country," American Economic Review, American Economic Association, vol. 105(5), pages 545-50, May. citation courtesy of

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