Informality in Colombia : Implications for Worker Welfare and Firm Productivity

Informality in Colombia : Implications for Worker Welfare and Firm Productivity

The level of informality in Colombia's labor market is high and persistent. When measuring informality of workers in terms of their contributions to health insurance and pension systems, 74.2 percent of all Colombian labor force was considered...

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Bibliographic Details
Main Author:	World Bank
Format:	Pre-2003 Economic or Sector Report
Language:	English
Published:	World Bank 2012
Subjects:	ACCESS TO CREDIT ACCESS TO JOB ACCESS TO SERVICES ACCESS TO TRAINING ACCOUNTING ADVERSE EFFECTS AFFORDABILITY AGE CATEGORY AGE GROUP AGED AGED WORKERS BARRIERS TO ENTRY BUSINESS FAILURE CHAMBERS OF COMMERCE CHILD WELFARE COLLEGE EDUCATION CONTRIBUTORY SYSTEM CROSS-SUBSIDIES DISCUSSIONS EARLY CHILDHOOD EARNINGS ECONOMIC BENEFITS ECONOMIC GROWTH ECONOMICS EDUCATION LEVEL EDUCATION LEVELS EDUCATION SYSTEM EMPLOYEE EMPLOYER EMPLOYERS EMPLOYMENT EFFECTS EMPLOYMENT LEVELS EMPLOYMENT SERVICES EMPLOYMENT SITUATIONS EMPLOYMENT TRENDS ENFORCEMENT MECHANISMS ENTREPRENEURS EXCLUSION EXPENDITURES EXTENDED FAMILIES EXTERNALITIES FAMILIES FINANCIAL CAPITAL FINANCIAL SUSTAINABILITY FIRM LEVEL FIRM PRODUCTIVITY FIRM SIZE FIRM SIZE DISTRIBUTION FIRM-LEVEL PRODUCTIVITY FLEXIBLE SAVINGS FORMAL LABOR MARKET GENDER GREATER ACCESS HEALTH CARE HEALTH INSURANCE HEALTH SERVICES HOLISTIC APPROACH HOUSEHOLD SURVEY HUMAN CAPITAL IMPLICIT TAXES INCOME INCOME SECURITY INCOME SUPPORT INCOME TAXES INEQUALITY INFORMAL EMPLOYMENT INFORMAL SECTOR INFORMAL SECTOR WORKERS INFORMAL WORKERS INNOVATION INNOVATIONS INSTITUTIONAL CAPACITY INTERNATIONAL LABOUR ORGANIZATION JOB OPPORTUNITIES JOB TRAINING JOBS LABOR CONTRACT LABOR CONTRACTS LABOR COSTS LABOR FORCE LABOR MARKET LABOR MARKET DEMAND LABOR MARKET POLICIES LABOR MARKET SEGMENTATION LABOR MARKETS LABOR MOBILITY LABOR REGULATION LABOUR LACK OF KNOWLEDGE LEARNING OPPORTUNITIES MINIMUM WAGE MORAL HAZARD MORTALITY MOTIVATION NEW COMPANIES NON-WAGE COSTS OLDER WORKERS ON-THE-JOB TRAINING PAYROLL DEDUCTIONS PAYROLL TAX PAYROLL TAXES PENSION FUND PENSION FUNDS PENSION SYSTEMS PRIVATE SECTOR PRODUCT MARKETS PRODUCTION UNIT PRODUCTION UNITS PRODUCTIVITY GROWTH PUBLIC CREDIT PUBLIC POLICY RETIREMENT RISK MANAGEMENT RURAL WORKERS SALARIED EMPLOYMENT SALARIED WORKER SALARIED WORKERS SAVINGS SAVINGS ACCOUNTS SEASONAL WORKERS SECONDARY SCHOOLING SELF EMPLOYMENT SELF-EMPLOYMENT SELF-EMPLOYMENT INITIATIVES SEVERANCE PAY SEVERANCE PAYMENT SEVERANCE PAYMENTS SHADOW ECONOMY SKILLED WORKERS SMALL BUSINESSES SMALL ENTERPRISES SOCIAL COSTS SOCIAL POLICIES SOCIAL POLICY SOCIAL PROTECTION SOCIAL SECURITY SOCIAL SERVICES SOURCES OF INCOME TECHNICAL ASSISTANCE TOTAL WAGE TRAINING COMPONENT TRAINING MARKET TRAINING PROGRAM TRAINING PROGRAMS TRAINING SYSTEM TRANSACTION COSTS TRIPARTITE UNEMPLOYED UNEMPLOYMENT UNEMPLOYMENT INSURANCE UNPAID FAMILY WORKERS UNPAID WORKERS URBAN AREAS URBAN WORKERS WAGE LEVEL WAGE POLICY WAGES WORKER WORKER PRODUCTIVITY WORKERS WORKING CONDITIONS YOUNG WORKERS YOUNGER WORKERS
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000350881_20100818102548 http://hdl.handle.net/10986/2889

Description
Summary:	The level of informality in Colombia's labor market is high and persistent. When measuring informality of workers in terms of their contributions to health insurance and pension systems, 74.2 percent of all Colombian labor force was considered informal in 2008. The informality debate has taken on a new sense of urgency, as Colombia's robust economic growth in recent years has not led to significant declines in informality. Even during the period of high economic growth experienced between 2001 and 2007, the share of workers in the informal sector remained very high. This report presents new insights to develop a better understanding of the nature, causes, and consequences of informality and its implications for social policies. The study analyzes informality using the conceptual framework presented in the World Bank flagship study on informality (Perry et al 2007), which shows that informality in the region is a function of both exclusion and exit, with some workers and firms opting out of the formal sector based on their assessment of the relative benefits and costs of formality versus informality. The focus of this report is on exploring options to enhance worker welfare and firm productivity through access to public goods and services, including social protection and productive inputs. Hence, the report adopts definitions and measures of informality separate measures for workers and firms that directly capture the extent to which they are linked to the state and, thus, to public goods and services.

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