
Contents
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7.1 Introduction 7.1 Introduction
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7.2 Some Early Labor Market Analyses 7.2 Some Early Labor Market Analyses
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7.2.1 Stylized Facts of LDC’s Labor Markets 7.2.1 Stylized Facts of LDC’s Labor Markets
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7.2.2 Some Early Models 7.2.2 Some Early Models
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7.2.3 Models with Wage Dualism and Unemployment 7.2.3 Models with Wage Dualism and Unemployment
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7.2.4 Evaluation 7.2.4 Evaluation
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7.3 Characterizations of the Urban Informal Sector 7.3 Characterizations of the Urban Informal Sector
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7.4 The Urban Informal Sector in Theoretical Labor Market Models 7.4 The Urban Informal Sector in Theoretical Labor Market Models
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7.5 Challenges and Responses 7.5 Challenges and Responses
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7.5.1 Challenges to the Earlier Views 7.5.1 Challenges to the Earlier Views
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7.5.2 How the UIS Is Defined in Empirical Studies 7.5.2 How the UIS Is Defined in Empirical Studies
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7.5.3 A Restatement of Results 7.5.3 A Restatement of Results
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7.6 Some Economic Anthropology – Type Findings 7.6 Some Economic Anthropology – Type Findings
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7.6.1 Diversity within the Informal Sector 7.6.1 Diversity within the Informal Sector
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7.6.2 Voluntary Participation in Upper-Tier Informal Activities but Not Easy Entry Ones 7.6.2 Voluntary Participation in Upper-Tier Informal Activities but Not Easy Entry Ones
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7.6.3 Linkages between the Formal Sector and Informal Sector Labor Markets 7.6.3 Linkages between the Formal Sector and Informal Sector Labor Markets
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7.7 Conclusions 7.7 Conclusions
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7.7.1 Major Findings 7.7.1 Major Findings
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7.7.2 Implications for Further Study 7.7.2 Implications for Further Study
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7 Labor Market Modeling and the Urban Informal Sector: Theory and Evidence
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Published:December 2018
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Abstract
The purpose of this chapter is to assess the compatibility between theoretical models of the urban informal sector (UIS) and empirical evidence on the workings of that sector in the context of developing countries’ labour markets. The major point is that, although the UIS is an excellent idea which has served us well in the 1970s and 1980s, there is a need in the next round of research to refine the terminology and the models in light of empirical findings which have come to the fore in the interim. Wage employment or self-employment in small-scale units may be better than or worse than employment in the formal sector. This is not a new point: diversity of earning opportunities and other job characteristics within the informal sector has long been noted. But only recently has this view come to the fore.
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