Essays on Labor Supply in the Multisectoral Markets of Brazil and Mexico

Abstract

The second paper examines heterogeneity in the self-employment sector by using motivational questions and characteristics of the firm and entrepreneur in factor and cluster analysis. Two factors are identified---generation and firm size---that are, by construction, orthogonal to one another. Several clusters emerge, broadly characterized as highly profitable and dynamic young firms, older firms that have stabilized at a small size, and young firms that act as an employer of last resort. Most of the firm owners cite that they selected self-employment over formal sector employment. The last paper examines the labor force entry and sectoral choice of married women when there is an expected or realized negative income shock. Discrete choice models are estimated, taking into consideration the state of the economy and changes in household employment and income. When the husband loses his job, wives tend to enter the higher paying formal or self-employment sectors rather than other informal work. However, when expected income falls, they are more likely to enter any informal sector. Thus, wives can enter any sector, but they will select the higher paying sectors when there is a realized negative income shock and the more flexible informal sectors when they are acting as insurance.