Earnings Premiums and Penalties for Self-Employment and Informal Employees around the World
This paper examines the earnings premiums associated with different types of employment in 73 countries. Workers are divided into four categories: non-professional own-account workers, employers and own-account professionals, informal wage employee...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/01/25747773/earnings-premiums-penalties-self-employment-informal-employees-around-world http://hdl.handle.net/10986/23630 |
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okr-10986-23630 |
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oai_dc |
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Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
UNION MEMBERSHIP LIVING STANDARDS PROFESSIONALS SELF EMPLOYED JOBS EMPLOYMENT RISKS HOUSEHOLD SURVEY EXPORT MARKETS ECONOMIC GROWTH SALARIED WORKERS WAGE GAP PRODUCTION INFORMAL SECTOR WAGE DIFFERENTIAL MINIMUM WAGE INCOME INDUSTRY CHARACTERISTICS EMPLOYMENT OPPORTUNITIES SALARY INCOME GROUP AGE GROUP INFORMATION LABOR FORCE HEALTH INSURANCE POLITICAL ECONOMY INTERNATIONAL LABOUR ORGANIZATION JOB EFFECTS LABOR ECONOMICS INCOME TAX LABOUR MARKET RIGIDITIES PRODUCTIVITY INCREASE RENTS EFFICIENCY WAGES SMALL BUSINESS LABOR MARKET PROFESSIONAL WORKERS LABOR MARKET FLEXIBILITY PER CAPITA INCOME TRAINING DEVELOPMENT ECONOMICS INDUSTRY WAGE WAGE MIDDLE INCOME ON-THE-JOB TRAINING BARGAINING POWER WORKER INCOME INEQUALITY LABOR PRODUCTIVITY PRODUCTIVITY OLDER WORKERS MARKETS HIGH INCOME ORGANIZATIONS HOUSEHOLD SURVEYS INCOME LEVELS RIGID LABOR MARKET JOB TRAINING WORKER PRODUCTIVITY STANDARDS LABOR TOTAL EMPLOYMENT FORMAL SECTOR WAGE JOB SEARCH LABOR REGULATION URBAN WORKERS EFFICIENCY HIGH INCOME COUNTRY UNIONS UNEMPLOYMENT EQUITY HUMAN CAPITAL FORMAL SECTOR WORKERS WORKERS WAGE BARGAINING WAGES INFORMAL LABOR MARKETS WOMEN WORKERS LABOR MARKET SEGMENTATION VALUE AVERAGE WAGE LABOR CONTRACT INCOME COUNTRY WAGE PREMIUM AGE GROUPS LABOUR MARKET INCOME DISTRIBUTION INCOME COUNTRIES LABOR MARKET INSTITUTIONS PRODUCTIVE FIRMS OPPORTUNITY COSTS HIGH INCOME COUNTRIES LABOR MARKET INDICATORS EMPLOYERS SALARIED EMPLOYEES ECONOMICS SALARIED EMPLOYMENT INSURANCE WAGE STRUCTURE LOW INCOME SEVERANCE PAY THEORY SECURITY ENTRY COSTS INVESTMENT RISK HUMAN RESOURCES MALE EMPLOYERS LABOR MARKET REGULATIONS BARGAINING ADJUSTMENT COST EMPLOYEE YOUNGER WORKERS WAGE DIFFERENTIALS INNOVATION LAW INFORMAL EMPLOYMENT WORKING HOURS FEMALE EMPLOYERS INFORMAL SECTOR WORKERS LABOUR PROFITS LABOR MARKETS ECONOMIC SHOCKS MIDDLE INCOME COUNTRIES SELF‐EMPLOYMENT WAGE EMPLOYMENT LABOR REGULATIONS INCOME LEVEL SEARCH COSTS INCOME GROUPS EMPLOYEES |
| spellingShingle |
UNION MEMBERSHIP LIVING STANDARDS PROFESSIONALS SELF EMPLOYED JOBS EMPLOYMENT RISKS HOUSEHOLD SURVEY EXPORT MARKETS ECONOMIC GROWTH SALARIED WORKERS WAGE GAP PRODUCTION INFORMAL SECTOR WAGE DIFFERENTIAL MINIMUM WAGE INCOME INDUSTRY CHARACTERISTICS EMPLOYMENT OPPORTUNITIES SALARY INCOME GROUP AGE GROUP INFORMATION LABOR FORCE HEALTH INSURANCE POLITICAL ECONOMY INTERNATIONAL LABOUR ORGANIZATION JOB EFFECTS LABOR ECONOMICS INCOME TAX LABOUR MARKET RIGIDITIES PRODUCTIVITY INCREASE RENTS EFFICIENCY WAGES SMALL BUSINESS LABOR MARKET PROFESSIONAL WORKERS LABOR MARKET FLEXIBILITY PER CAPITA INCOME TRAINING DEVELOPMENT ECONOMICS INDUSTRY WAGE WAGE MIDDLE INCOME ON-THE-JOB TRAINING BARGAINING POWER WORKER INCOME INEQUALITY LABOR PRODUCTIVITY PRODUCTIVITY OLDER WORKERS MARKETS HIGH INCOME ORGANIZATIONS HOUSEHOLD SURVEYS INCOME LEVELS RIGID LABOR MARKET JOB TRAINING WORKER PRODUCTIVITY STANDARDS LABOR TOTAL EMPLOYMENT FORMAL SECTOR WAGE JOB SEARCH LABOR REGULATION URBAN WORKERS EFFICIENCY HIGH INCOME COUNTRY UNIONS UNEMPLOYMENT EQUITY HUMAN CAPITAL FORMAL SECTOR WORKERS WORKERS WAGE BARGAINING WAGES INFORMAL LABOR MARKETS WOMEN WORKERS LABOR MARKET SEGMENTATION VALUE AVERAGE WAGE LABOR CONTRACT INCOME COUNTRY WAGE PREMIUM AGE GROUPS LABOUR MARKET INCOME DISTRIBUTION INCOME COUNTRIES LABOR MARKET INSTITUTIONS PRODUCTIVE FIRMS OPPORTUNITY COSTS HIGH INCOME COUNTRIES LABOR MARKET INDICATORS EMPLOYERS SALARIED EMPLOYEES ECONOMICS SALARIED EMPLOYMENT INSURANCE WAGE STRUCTURE LOW INCOME SEVERANCE PAY THEORY SECURITY ENTRY COSTS INVESTMENT RISK HUMAN RESOURCES MALE EMPLOYERS LABOR MARKET REGULATIONS BARGAINING ADJUSTMENT COST EMPLOYEE YOUNGER WORKERS WAGE DIFFERENTIALS INNOVATION LAW INFORMAL EMPLOYMENT WORKING HOURS FEMALE EMPLOYERS INFORMAL SECTOR WORKERS LABOUR PROFITS LABOR MARKETS ECONOMIC SHOCKS MIDDLE INCOME COUNTRIES SELF‐EMPLOYMENT WAGE EMPLOYMENT LABOR REGULATIONS INCOME LEVEL SEARCH COSTS INCOME GROUPS EMPLOYEES Gindling, T. H. Mossaad, Nadwa Newhouse, David Earnings Premiums and Penalties for Self-Employment and Informal Employees around the World |
| relation |
Policy Research Working Paper;No. 7530 |
| description |
This paper examines the earnings
premiums associated with different types of employment in 73
countries. Workers are divided into four categories:
non-professional own-account workers, employers and
own-account professionals, informal wage employees, and
formal wage employees. Approximately half of the workers in
low-income countries are non-professional own-account
workers and the majority of the rest are informal employees.
Fewer than 10 percent are formal employees, and only 2
percent of workers in low-income countries are employers or
own-account professionals. As per capita gross domestic
product increases, there are large net shifts from
non-professional own-account work into formal wage
employment. Across all regions and income levels,
non-professional own-account workers and informal wage
employees face an earnings penalty compared with formal wage
employees. But in low-income countries this earnings penalty
is small, and non-professional own-account workers earn a
positive premium relative to all wage employees. Earnings
penalties for non-professional own-account workers tend to
increase with gross domestic product and are largest for
female workers in high-income countries. Men earn greater
premiums than women for being employers or own-account
professionals. These results are consistent with
compensating wage differentials and firm quasi-rents playing
important roles in explaining cross-country variation in
earnings penalties, and raise questions about the extent to
which the unskilled self-employed are rationed out of formal
wage work in low-income countries. |
| format |
Working Paper |
| author |
Gindling, T. H. Mossaad, Nadwa Newhouse, David |
| author_facet |
Gindling, T. H. Mossaad, Nadwa Newhouse, David |
| author_sort |
Gindling, T. H. |
| title |
Earnings Premiums and Penalties for Self-Employment and Informal Employees around the World |
| title_short |
Earnings Premiums and Penalties for Self-Employment and Informal Employees around the World |
| title_full |
Earnings Premiums and Penalties for Self-Employment and Informal Employees around the World |
| title_fullStr |
Earnings Premiums and Penalties for Self-Employment and Informal Employees around the World |
| title_full_unstemmed |
Earnings Premiums and Penalties for Self-Employment and Informal Employees around the World |
| title_sort |
earnings premiums and penalties for self-employment and informal employees around the world |
| publisher |
World Bank, Washington, DC |
| publishDate |
2016 |
| url |
http://documents.worldbank.org/curated/en/2016/01/25747773/earnings-premiums-penalties-self-employment-informal-employees-around-world http://hdl.handle.net/10986/23630 |
| _version_ |
1764454378862804992 |
| spelling |
okr-10986-236302021-04-23T14:04:16Z Earnings Premiums and Penalties for Self-Employment and Informal Employees around the World Gindling, T. H. Mossaad, Nadwa Newhouse, David UNION MEMBERSHIP LIVING STANDARDS PROFESSIONALS SELF EMPLOYED JOBS EMPLOYMENT RISKS HOUSEHOLD SURVEY EXPORT MARKETS ECONOMIC GROWTH SALARIED WORKERS WAGE GAP PRODUCTION INFORMAL SECTOR WAGE DIFFERENTIAL MINIMUM WAGE INCOME INDUSTRY CHARACTERISTICS EMPLOYMENT OPPORTUNITIES SALARY INCOME GROUP AGE GROUP INFORMATION LABOR FORCE HEALTH INSURANCE POLITICAL ECONOMY INTERNATIONAL LABOUR ORGANIZATION JOB EFFECTS LABOR ECONOMICS INCOME TAX LABOUR MARKET RIGIDITIES PRODUCTIVITY INCREASE RENTS EFFICIENCY WAGES SMALL BUSINESS LABOR MARKET PROFESSIONAL WORKERS LABOR MARKET FLEXIBILITY PER CAPITA INCOME TRAINING DEVELOPMENT ECONOMICS INDUSTRY WAGE WAGE MIDDLE INCOME ON-THE-JOB TRAINING BARGAINING POWER WORKER INCOME INEQUALITY LABOR PRODUCTIVITY PRODUCTIVITY OLDER WORKERS MARKETS HIGH INCOME ORGANIZATIONS HOUSEHOLD SURVEYS INCOME LEVELS RIGID LABOR MARKET JOB TRAINING WORKER PRODUCTIVITY STANDARDS LABOR TOTAL EMPLOYMENT FORMAL SECTOR WAGE JOB SEARCH LABOR REGULATION URBAN WORKERS EFFICIENCY HIGH INCOME COUNTRY UNIONS UNEMPLOYMENT EQUITY HUMAN CAPITAL FORMAL SECTOR WORKERS WORKERS WAGE BARGAINING WAGES INFORMAL LABOR MARKETS WOMEN WORKERS LABOR MARKET SEGMENTATION VALUE AVERAGE WAGE LABOR CONTRACT INCOME COUNTRY WAGE PREMIUM AGE GROUPS LABOUR MARKET INCOME DISTRIBUTION INCOME COUNTRIES LABOR MARKET INSTITUTIONS PRODUCTIVE FIRMS OPPORTUNITY COSTS HIGH INCOME COUNTRIES LABOR MARKET INDICATORS EMPLOYERS SALARIED EMPLOYEES ECONOMICS SALARIED EMPLOYMENT INSURANCE WAGE STRUCTURE LOW INCOME SEVERANCE PAY THEORY SECURITY ENTRY COSTS INVESTMENT RISK HUMAN RESOURCES MALE EMPLOYERS LABOR MARKET REGULATIONS BARGAINING ADJUSTMENT COST EMPLOYEE YOUNGER WORKERS WAGE DIFFERENTIALS INNOVATION LAW INFORMAL EMPLOYMENT WORKING HOURS FEMALE EMPLOYERS INFORMAL SECTOR WORKERS LABOUR PROFITS LABOR MARKETS ECONOMIC SHOCKS MIDDLE INCOME COUNTRIES SELF‐EMPLOYMENT WAGE EMPLOYMENT LABOR REGULATIONS INCOME LEVEL SEARCH COSTS INCOME GROUPS EMPLOYEES This paper examines the earnings premiums associated with different types of employment in 73 countries. Workers are divided into four categories: non-professional own-account workers, employers and own-account professionals, informal wage employees, and formal wage employees. Approximately half of the workers in low-income countries are non-professional own-account workers and the majority of the rest are informal employees. Fewer than 10 percent are formal employees, and only 2 percent of workers in low-income countries are employers or own-account professionals. As per capita gross domestic product increases, there are large net shifts from non-professional own-account work into formal wage employment. Across all regions and income levels, non-professional own-account workers and informal wage employees face an earnings penalty compared with formal wage employees. But in low-income countries this earnings penalty is small, and non-professional own-account workers earn a positive premium relative to all wage employees. Earnings penalties for non-professional own-account workers tend to increase with gross domestic product and are largest for female workers in high-income countries. Men earn greater premiums than women for being employers or own-account professionals. These results are consistent with compensating wage differentials and firm quasi-rents playing important roles in explaining cross-country variation in earnings penalties, and raise questions about the extent to which the unskilled self-employed are rationed out of formal wage work in low-income countries. 2016-01-12T22:24:21Z 2016-01-12T22:24:21Z 2016-01 Working Paper http://documents.worldbank.org/curated/en/2016/01/25747773/earnings-premiums-penalties-self-employment-informal-employees-around-world http://hdl.handle.net/10986/23630 English en_US Policy Research Working Paper;No. 7530 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |