The European Journal of Comparative Economics

ISSN: 1824-2979

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EJCE Year: 2021, December. Volume: 18 - Issue: 2

Informal employment in the Kabylia region (Algeria): labour force segmentation, mobility and earnings

by Youghourta Bellache, Omar Babou, Oksana Nezhyvenko, Philippe Adair

Start page: 139 - End page: 172

Keywords: Algeria, Decomposition model, Earning functions, Informal employment, Mobility, Segmentation

Jel code: E26; J46

DOI: 10.25428/1824-2979/004

Abstract:

A pooled sample of 3,290 Algerian workers from two regional household surveys captures the determinants of access to the formal vs. informal labour market segments. Youth, female gender and low educational attainment drive informal employment. Segmentation does not preclude occupational mobility, rather towards formal segments. Earnings functions on a sub-sample of 1,753 of formal and informal employees highlight an average 25 per cent wage gap, being lower among women, whereas gender pay gap is lower in informal employment. A quantile regression confirms that the distribution of earnings according to informality is somehow gender specific. A decomposition model shows that over two thirds of formal/informal segmentation are explained, whereas unexplained variables account for the highest share of the male/female wage gap.

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