This paper discuses the effect of the minimum wage on the decision to join the informal job sector. We estimated a pseudo panel of the engagement in the informal sector using an IV-probit. The findings show that an increase in the minimum wage leads to a substitution effect between young and...

This article aims to analyze the effect of minimum wage levels on the decision to join the informal job sector. We estimated a pseudo panel model of engagement in the informal sector using an IV-probit. Our results show that an increased wage gap — the relative difference between observed and...

Informality is a common phenomenon in developing countries and an unusual one in industrialized countries. The persistence of informal employment is indicative of the impossibility of moving out of this status for a certain period of time. Using pseudo panel data, empirical evidence is presented...