Earnings Premium in the Formal Sector: Evidence from IFLS

15:00-16:30, Monday, June 8, 2020

Tencent Meeting (Meeting ID: 330 347 320)

Dr. Xiaochen BIAN is a postdoctoral fellow at Centre for Family and Population Research, National University of Singapore. She received her PHD in Economics from National University of Singapore in 2017. She has been working on the Indonesian Family Life Survey since her PhD years.

This paper studies the earnings gap between the formal and the informal sectors in Indonesia using data from the Indonesia Family Life Survey (IFLS). Though the formal sector is believed to offer higher wages on average due to government regulations such as minimum wage, the empirical literature has yet not reached an agreement on the existence of an earnings premium in the formal sector conditional on personal characteristics. We find that controlling for selection into the formal sector using propensity score matching lowers considerably the premium associated with the formal sector. In addition, we find that this premium varies somewhat given the definition of the informal and formal sectors.

For more information of the seminar, scan the following QR code(s) to join Tencent QQ group (904 544 292) or WeChat group named "IAER Seminar", please.

QQ Group

WeChat Group (Valid until 6/13/2020)