2002年-世界发展银行全球_Exchange_Rate_Appreciations_Labor_Market_Rigidities_and_Informality_42页_517kb

Summary of "Exchange Rate Appreciations, Labor Market Rigidities, and Informality"

Core Content

This paper explores the relationship between exchange rate appreciations, labor market rigidities, and informality in Latin American countries, particularly focusing on Brazil, Colombia, Mexico, Argentina, and Chile. It bridges two economic literatures: one examining the nature of the informal labor market and the other analyzing the causes of real exchange rate fluctuations.

The paper proposes a small open economy model that incorporates:

• A formal sector producing tradables (T) and an informal sector producing non-tradables (N).
• Heterogeneity in entrepreneurial ability among informal self-employed workers.
• Capital adjustment costs, reflecting imperfect capital markets and credit constraints.
• A representative consumer maximizing lifetime utility, with consumption decisions influenced by relative prices and productivity.

The model is used to analyze the co-movements between relative formal/informal incomes, sector sizes, and the real exchange rate, aiming to identify the sources of exchange rate fluctuations and the degree of labor market distortion.

Main Points and Key Findings

1. Model Overview

• The informal sector is treated as a non-tradables sector, unregulated and unaccounted for in official statistics.
• Workers in the formal sector are assumed to be homogeneous, while informal workers differ in entrepreneurial ability.
• Capital is mobile across sectors but subject to adjustment costs, which prevent instantaneous reallocation.
• The real exchange rate is defined as the relative price of tradables to non-tradables.

2. Labor Market Dynamics

• In the absence of formal sector rigidities, relative sector sizes and relative incomes move together.
• If formal sector rigidities are binding (e.g., due to productivity shocks), relative earnings and sector sizes move in opposite directions.
• The presence of formal sector rigidities can lead to a segmented labor market, with workers being rationed into the informal sector, thereby reducing their relative earnings.

3. Empirical Evidence

• Mexico (1987-92): Appreciation of the peso appears to be driven by a boom in the non-tradables sector rather than wage inertia. The informal sector expanded and relative wages increased, suggesting a "real" appreciation.
• Colombia (post-1995): The appreciation was partly due to labor market rigidities, as evidenced by the negative co-movements of relative wages and sector sizes, indicating a period of significant segmentation.
• Chile (1975-1982): The appreciation was not driven by backward-looking wage behavior, as relative sector sizes and incomes moved together. This supports the "real" appreciation hypothesis.
• Argentina (1988-1994): The appreciation coincided with a rise in informal non-tradables and relative wages, suggesting a real demand-driven appreciation.
• Brazil (post-1987): The secular increase in informal employment and relative wages aligns with a real appreciation, indicating that the informal sector may be desirable for many workers.

4. Theoretical Insights

• Balassa-Samuelson Effect: A productivity shock in the formal sector leads to an appreciation of the real exchange rate, as non-tradables become relatively more expensive.
• Entrepreneurial Ability: The pivotal worker (with ability $f^*$) determines the relative size of the formal and informal sectors.
• Capital Adjustment Costs: These prevent immediate labor reallocation and affect the dynamics of sector sizes and earnings.
• Preference Shifts: A shift toward non-tradables consumption increases informal self-employment and consumption, while formal wages remain unchanged.

Key Equations and Relationships

• Real Exchange Rate Equation:
  $$
  \hat{p} + \hat{A}N + \hat{f}^* - (1 - a_N) \hat{k}* = \hat{r} = 0
  $$
• Relative Earnings and Sector Sizes:
  $$
  \hat{p} = \frac{1 - a_N}{h_{LT}} \hat{A}_T - \hat{A}_N
  $$
• Relative Sector Size:
  $$
  \hat{f}^* = -\Omega_1 \left[ -\hat{g} + \frac{\hat{A}T}{h{LT}} \left[ j_{LT} + j_{se} - 1 + (1 - a_N)(g(1 - q) - 1) \right] + \hat{A}_N (1 - g(1 - q)) \right]
  $$
• Relative Earnings:
  $$
  p \hat{Y}N = \frac{\hat{A}T}{h{LT}} - \Psi \hat{f}^* = \frac{\hat{A}T}{h{LT}} + \Omega_2 \left[ -\hat{g} + \frac{\hat{A}T}{h{LT}} \left[ j{LT} + j_{se} - 1 + (1 - a_N)(g(1 - q) - 1) \right] + \hat{A}_N (1 - g(1 - q)) \right]
  $$

Conclusion

The paper argues that the behavior of relative sector sizes, relative incomes, and the real exchange rate can help distinguish between inertial and real explanations for exchange rate appreciations. It suggests that in many Latin American countries, the appreciation was driven by real factors such as productivity gains or increased non-tradable demand, rather than wage inertia or formal sector rigidities. The model provides a framework for understanding these dynamics and supports the empirical findings that the informal sector may not always be a residual of distortion but can also represent a desirable, self-regulated entrepreneurial activity.