Karine S. Moe

Youth Education and Work in Mexico

A holistic approach to schooling in developing countries-considering schooling in conjunction with labor force work, child care, and other household responsibilities-is necessary to construct policies that will encourage greater educational attainment, especially for children and youth in poor families. Using data from the Encuesta Nacional de Empleo Urbano (ENEU), we jointly estimate the determinants of studying and working, doing both, or doing neither for 12 to 17 year-olds in urban Mexico. We consider the implications of defining work to include both labor force employment and household domestic work, in contrast to the traditional definition of market-based employment. Results based on the traditional definition indicate that girls are 13.8 percentage points more likely than boys to specialize in school, while those based on the more inclusive measure of work indicate that girls are 7.7 percentage points less likely than boys to specialize in school.

Tax Policies and Informal Employment: The Asian Experience

This paper develops and estimates a model linking tax policies to the size of the informal sector. Our results suggest that informal employment responds to the strength of enforcement and, to a lesser extent, to tax rates. Looking across sectors, we find service sector informal employment responds to both changes in tax rates and enforcement, while manufacturing sector informal employment responds only to enforcement. Quantitatively, changes in enforcement affect the manufacturing informal sector more than the service sector. These results are robust to various measures of informal employment and hold for other countries outside of Asia as well. Since informal employment (and hence output) is related to a countrys GDP, these results suggest that policy makers should consider the effect of their policies on the size of the informal sector. JEL classification: O17; O53; H26

The Dynamics of Informal Employment

The informal sector, which produces legal goods but does not comply with government regulations, is a functioning part of all economies, with a proportion of the labor force ranging from 17 percent in OECD countries to 60 percent in developing countries. Using a dynamic model that includes an informal sector, this paper illustrates the natural dynamics of the sector, describes how tax policy affects its size, and quantifies the costs of having it. Simulations yield movements in informal employment and output consistent with empirical observations. We find that the U.S. informal sector accounts for about 5 percent of U.S.labor hours and produces about 3 percent of U.S. GDP in steady state. Strategies for reducing the size of the sector are discussed. We find, however, that the distortion from this sector in terms of lifetime loss in an economys capital stock, is minimal--supporting those who want to keep the informal sector as a functioning part of society.

The influence of government policies on informal labor: Implications for long-run growth

Using cross-sectional data from industrialized and developing economies, we examine long-run growth regressions linking government policies, informal employment and real GDP per worker. We find that changes in government policies of taxation and enforcement significantly affect growth in the informal sector. Further, we show that increases (decreases) in informal employment significantly and negatively (positively) affect a countrys growth rate of real GDP per worker. The empirical link between government policies, informal employment and real GDP per worker holds irrespective of a countrys development. On average, changes in government policies, through their effect on the size of the informal sector, account for 6 percent of the growth rate of real GDP per worker between 1960 and 1990.

Marking Time: An Analysis of Youth Hours of Work and Study in Urban Mexico

This paper argues that a more complex view of work and schooling is critical to poor countries as they implement policies to increase educational attainment. In this analysis of 12-17-year-old girls and boys in urban Mexico, we expand the traditional approach in two dimensions by (1) moving from an analysis of participation to one of hours of participation, and (2) broadening the definition of work to include youths household responsibilities. Copyright

On the Need for Gender in Dynamic Models

In this paper we emphasize the need for more theoretical research using dynamic models that include gender as a variable of analysis. We begin by summarizing some of the main observations characterizing fertility, gender, and economic growth. We then explore three types of theoretical models: one-sex dynamic, two-sex static, and two-sex dynamic. We conclude that more models of the last type – dynamic models that include gender in the analysis – are needed to analyze issues that involve both an intertemporal and a gender dimension.