The income and decision function of workers in the informal sector
Date
2014-12
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
As many workers continue to enter the informal sector there is a need to study the characteristics of informal sectors and their decision to engage in entrepreneurial activities despite economic
growth. Using the FIES, the paper attempts to determine the effects of specific factors on income determination and the probability of a household to engage in the informal sector. Results have
shown that households residing in regions other than the NCR have a higher probability to engage in entrepreneurial activities and urban areas have a bigger probability to have higher
incomes. All sectors except have higher incomes and lower probability to engage in entrepreneurial activities compared to the agricultural sector. Furthermore, heads with more years of schooling, especially those who finished college, have higher incomes and are unlikely to engage in entrepreneurial activities, a result that is consistent with Schultz' hypothesis.
Description
Keywords
Informal sector, Income, Decision function