¿Es la política social una causa de la informalidad en México?.

Levy (2008) has suggested that the expansion of non-targeted social programs could be inducing an increase in economic informality in countries like Mexico. This hypothesis, however, assumes the existence of integrated and competitive labor markets in the economy. In this work we test this assumption for the Mexican case and we find that there is a wage premium in Mexico’s formal labor market. This means that an individual earns a higher wage when she works in the formal sector of the economy than an individual with similar characteristics that works at the informal sector. We therefore conclude that Mexico’s labor market is segmented and that an increase in social programs is not causing an increase in informality in the country.