The price of fringe benefits when formal and informal labor markets coexist

David Argente, Jorge Luis García

Research output: Contribution to journalArticle

Abstract

We use the Mexican labor market structure to price the set of fringe benefits that household heads receive when formally employed. We exploit longitudinal, nationally-representative information on household heads who are formal, informal, or switch status at least once in our data. Using monthly labor income and an efficient markets hypothesis, we identify a standard linear model which accounts for time-variant household heads’ characteristics and household level and time fixed effects. Under the usual strict-exogeneity assumption, we find that the price of fringe benefits is approximately 7.9% of the average monthly labor income of informal workers, or $217 USD. JEL Classification:D4; J3; J4

Original languageEnglish (US)
Article number1
JournalIZA Journal of Labor Economics
Volume4
Issue number1
DOIs
StatePublished - Dec 1 2015

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Labour market
Household
Fringe benefits
Labor income
Efficient market hypothesis
Fixed effects
Exogeneity
Market structure
JEL classification
Workers

All Science Journal Classification (ASJC) codes

  • Industrial relations
  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

Cite this

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The price of fringe benefits when formal and informal labor markets coexist. / Argente, David; García, Jorge Luis.

In: IZA Journal of Labor Economics, Vol. 4, No. 1, 1, 01.12.2015.

Research output: Contribution to journalArticle

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