Iranian Journal of Economic Research

Investigating the Effect of Poverty on Informal Employment in Iran Using the Two-Stage Heckman Probit Method

Articles in Press

Document Type : Research Paper

Authors

Shima Namazi Zavareh 1
Farshad Momeni 2
Ali Asghar Salem 3

1 Master's degree, Department of Economic Development and Planning, Faculty of Economics, Allameh Tabatabai University, Tehran, Iran

2 Department of Economic Development and Planning, Faculty of Economics, Allameh Tabatabai University, Tehran, Iran

3 Associate Professor of University of Allameh Tabatabai,Economic department

https://doi.org/10.22054/ijer.2024.78386.1268
Abstract
A major reason for pushing people towards informal jobs is the motivation of necessity. In fact, informal employment is a kind of survival strategy for those who have no other way to earn money and support themselves and their families except by working in these types of low-paid jobs. At the level of development, the continuation of this trend affects the economic competitiveness and the quality of life of the citizens, and the foundation of national production and technological and innovative production faces serious limitations. the purpose of this article is to investigate the effect of household poverty along with other socio-economic factors on informal employment in urban areas of Iran in 2019. For this purpose, by using the detailed data of the expenditure and income plan of urban households, first, the poverty line was calculated based on the absolute poverty approach for urban areas and poor households were identified. Then according to the index presented in this research, the type of employment of households was determined in terms of formal and informal. The results of estimating the research model using the two-stage Heckman Probit method indicate that household poverty leads to a significant increase in informal employment, so that with an increase in poverty, the probability of being informally employed increases by 0.57. The strategic message of this study is that the problem of poverty and informal employment in Iran can be overcome only by upgrading the technological production base and creating value-creating capabilities based on increasing productivity.

Keywords

Informal employment
poverty
social security
two-stage Heckman Probit method
Subjects
Iranian Journal of Economic Research

Articles in Press, Accepted Manuscript
Available Online from 27 August 2024

  • Receive Date 20 February 2024
  • Revise Date 27 August 2024
  • Accept Date 25 May 2024
  • First Publish Date 27 August 2024

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