TY  - RPRT
        AU  - Montes, Juan Gabriel Delgado
AU  - Corrales, Javier
AU  - Singh, Prakarsh
        TI  - The 'Informality Gap': Can Education Help Minorities Escape Informal Employment? Evidence from Peru
        PY  - 2016/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 10389
        UR  - https://www.iza.org/publications/dp10389
        AB  - Discrimination in formal labor markets can push discriminated groups into labor informality, where wages are lower and pensions scarce. In this paper, we explore whether education offsets discrimination by empowering discriminated groups to successfully compete for formal jobs. Specifically, we calculate the returns to education on formal employment for a discriminated group (indigenous Peruvians). We find that certain education levels –primary and tertiary–allow indigenous workers equal access to formal jobs.
But, for indigenous workers with only secondary education, we find an "informality trap" where returns to secondary education are 6.7 percentage points lower, a difference larger than the net returns of primary education. We find that differences in education quality across districts, more than migration and industry-specific patterns, are the main drivers of this effect. These findings have policy implications suggesting improvements to quality are essential for secondary education to empower discriminated groups to successfully compete in labor markets.
        KW  - exclusion
KW  - social security
KW  - informal labor markets
KW  - education
KW  - Latin America
        ER  -