%0 Report
        %A Badaoui, Eliane El
%A Strobl, Eric
%A Walsh, Frank
        %T The Formal Sector Wage Premium and Firm Size
        %D 2007
        %8 2007 Nov
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 3145
        %U https://www.iza.org/index.php/publications/dp3145
        %X We show theoretically that when larger firms pay higher wages and are more likely to be caught defaulting on labour taxes, then large high-wage firms will be in the formal sector and small low-wage firms will be in the informal sector. The formal sector wage premium is thus just a firm size wage differential. Using data from the South African labour force survey we illustrate that firm size is indeed the key variable determining whether a formal sector premium exists.
        %K informal sector
%K wage premium
%K firm size