%0 Report %A Flabbi, Luca %A Tejada, Mauricio %T Are Informal Self-Employment and Informal Employment as Employee Behaviorally Distinct Labor Force States? %D 2023 %8 2023 Jun %I Institute of Labor Economics (IZA) %C Bonn %7 IZA Discussion Paper %N 16225 %U https://www.iza.org/publications/dp16225 %X The paper performs both a parametric and non-parametric analysis to address a fundamental question in the growing literature using search models to study labor market informality: should informal self-employment and informal employment as employee be considered two different labor market states? Both the non-parametric and the parametric tests strongly reject equality between the two states, cautioning against aggregating them in a common "informality state." The parametric model indicates the source of the difference in the high dispersion of informal self-employment income and in the low duration of informal employee jobs. %K labor market frictions %K search and matching %K informality %K self-employment