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Keywords:

  • segmentation;
  • formal and informal sectors;
  • Nicaragua

Abstract

This paper investigates the structure of the labor market in Nicaragua and is aimed at understanding the determinants of the choice between a number of segments, namely inactivity, unemployment, agriculture, the formal and the informal sectors. In addition, a model with a separate participation equation is estimated: it allows us to understand that age mainly is a supply-side factor, while education is an important element determining employer's choices Information networks, captured by the presence of a household member working in the formal sector, and geographical barriers to mobility also play a leading role. Copyright © 2009 John Wiley & Sons, Ltd.