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Risk Attitudes, Informal Employment and Wages: Evidence from a Transition Country
Ein Vortrag von Hartmut Lehmann (University of Bologna) im Rahmen der Seminarreihe des AB Ökonomie am IOS.
Datum: 3. August 2017 (Donnerstag!)
Zeit: 13.30 Uhr
Ort: WiOS, Landshuter Str. 4 (Raum 109)
Using data from the four waves of the Ukrainian Longitudinal Monitoring Survey – ULMS (2003, 2004, 2007 and 2012), we analyze whether workers with a higher willingness to take risks are more likely to select into informal employment contracts. The data permit us to distinguish between five employment states: formal and informal self-employment, formal salaried employment, voluntary informal salaried employment and involuntary informal salaried employment. The empirical evidence reveals risk attitudes as a strong determinant of the incidence of all types of informal employment. We take this as evidence that the labor market in Ukraine is rather integrated and that segmentation plays a minor role. Our earnings risk analysis demonstrates that workers with a higher willingness to take risks are more likely to choose employment states with a wider distribution of residual wages. We also provide evidence that our results are not driven by reverse causality: risk attitudes impact on the choice of employment state whilst this latter does not seem to influence risk attitudes.