This article aims to analyze the effect of minimum wage levels on the decision to join the informal job sector. We estimated a pseudo panel model of engagement in the informal sector using an IV-probit. Our results show that an increased wage gap — the relative difference between observed and...

This paper discuses the effect of the minimum wage on the decision to join the informal job sector. We estimated a pseudo panel of the engagement in the informal sector using an IV-probit. The findings show that an increase in the minimum wage leads to a substitution effect between young and...