Rural-urban migration and informality in the metropolitan areas of Mexico. A short-term estimation

  • Jaime Lara University of Monterrey
  • Marla Cruz Yedra University of Monterrey
  • Diana V. Moyeda López University of Monterrey
  • Adriana Prats Molina University of Monterrey
  • José A. Téllez Muñoz University of Monterrey
Keywords: segmented labour markets, unemployment, labour force participation
JEL Classification: J46, J6, O15

Abstract

We estimate the impact of rural-urban migration from the period 2010-2015 on informality in metropolitan areas of Mexico. The estimation of ordinary least squares does not establish any effect, while the estimation with instrumental variables finds that exogenous rural urban migration increases informality. Other variables such as unemployment, labour participation and inequality are unaffected, indicating that informal sector allows to absorb changes in labour supply in the short term, albeit with possible negative effects on labour income of substitute workers.

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Published
01-07-2020
How to Cite
Lara, J., Cruz Yedra, M., Moyeda López, D., Prats Molina, A., & Téllez Muñoz, J. (2020). Rural-urban migration and informality in the metropolitan areas of Mexico. A short-term estimation. Estudios Económicos, 35(2), 297-329. https://doi.org/10.24201/ee.v35i2.405