Effects of Colombia's Social Protection System on Workers' Choice between Formal and Informal Employment

Effects of Colombia's Social Protection System on Workers' Choice between Formal and Informal Employment

This paper examines whether the Colombian government's expansion of social programs in the early 1990s, particularly the publicly provided health insurance, discouraged formal employment. Using household survey data and variation across munici...

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Bibliographic Details
Main Authors:	Camacho, Adriana, Conover, Emily, Hoyos, Alejandro
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2013
Subjects:	AGE CATEGORY AGE GROUP BUSINESS CYCLES CAPACITY BUILDING CHILD HEALTH CITIES CITIZENS CULTURAL CHANGE DENTAL CARE DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISABILITY DOMESTIC WORKERS DOWNWARD BIAS ECONOMIC GROWTH ECONOMIC POLICY ELDERLY EMPLOYEE ENFORCEMENT OF LAWS EXTENDED FAMILIES FAMILY COMPOSITION FAMILY MEMBERS FINANCIAL INSTITUTIONS FIRING COSTS FIRM SIZE HEALTH CARE HEALTH CARE COVERAGE HEALTH CARE REFORM HEALTH EDUCATION HEALTH EXPENDITURES HEALTH INSURANCE HEALTH OUTCOMES HEALTH PLAN HEALTH REFORM HEALTH REFORMS HEALTH SECTOR HEALTH SECTOR REFORM HEALTH SERVICES HOSPITAL HOSPITAL CARE HOUSEHOLD CHARACTERISTICS HOUSEHOLD LEVEL HOUSEHOLD SIZE HOUSEHOLD SURVEY ILLNESSES INCOME INFORMAL EMPLOYMENT INFORMAL LABOR MARKET INFORMAL SECTOR JOB SECURITY JOBS KIDS LABOR FORCE LABOR LAWS LABOR MARKET REFORMS LABOR MARKET RIGIDITIES LABOR MARKETS LABOR REGULATION LABOR REGULATIONS LABOR RELATIONS LABOUR LABOUR MARKET LABOUR MARKET REFORM LAWS LEATHER INDUSTRIES LEGISLATIVE CHANGES LEVELS OF EDUCATION LIVING CONDITIONS MARITAL STATUS MATERNITY CARE MEDICINES MINIMUM WAGE MOTHER NATIONAL LEVEL NATURAL GAS NEWBORNS NON-WAGE COSTS OCCUPATION OLDER PEOPLE OUTPATIENT SERVICES PAYROLL TAXES PENSIONS POLICY DECISIONS POLICY DISCUSSIONS POLICY RESEARCH POLICY RESEARCH WORKING PAPER POPULATION CENSUS PREVIOUS RESULTS PREVIOUS STUDIES PRIVATE SECTOR PRIVATE SECTOR WORKERS PROBABILITY PRODUCTIVITY PROGRESS PUBLIC ADMINISTRATION PUBLIC HEALTH PUBLIC HEALTH INSURANCE PUBLIC POLICY PUBLIC SECTOR EMPLOYMENT RETAIL TRADE SECRETARY OF HEALTH SEX SIBLINGS SICK LEAVE SOCIAL BENEFITS SOCIAL POLICY SOCIAL PROGRAMS SOCIAL SECURITY SOCIAL SERVICES SOCIAL WELFARE SPOUSE SPOUSES UNEMPLOYED UNEMPLOYED POOR UNEMPLOYMENT UNINTENDED CONSEQUENCE UNIVERSAL HEALTH INSURANCE COVERAGE UNIVERSITY EDUCATION UNPAID FAMILY WORKERS WAGES WORKER WORKERS WORKING-AGE POPULATION WORKPLACE YOUNG PEOPLE YOUNG WORKERS
Online Access:	http://documents.worldbank.org/curated/en/2013/08/18092449/effects-colombias-social-protection-system-workers-choice-between-formal-informal-employment http://hdl.handle.net/10986/15995

Description
Summary:	This paper examines whether the Colombian government's expansion of social programs in the early 1990s, particularly the publicly provided health insurance, discouraged formal employment. Using household survey data and variation across municipalities in the onset of interviews for the SISBEN, the instrument used to identify beneficiaries for public health insurance, it shows robust and consistent estimates of an increase in informal employment of approximately 4 percentage points. Similar results are obtained using an alternative dataset, consisting of a panel of individuals interviewed for the first and second SISBEN. The findings suggest that marginal individuals optimized when deciding whether to participate in the formal sector.

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