Trade liberalization and informality in Argentina: exploring the adjustment mechanisms

Latin American Economic Review

Table 1 Tariffs and Informality.

Years	Obs	Tariffs		Informality
		Avg.	Std. dev.	National	Manufactures			Non-traded
		Avg.	Std. dev.	National	Total	Small industries	Large industries	Non-traded
1980	1041	40.95	10.17	20.28	15.62	32.89	10.75	22.94
1985	1048	31.55	6.37	23.19	17.80	33.76	12.61	25.54
1986	1146	29.98	6.98	24.78	19.55	34.72	14.95	27.39
1987	2346	29.39	7.55	26.93	21.12	41.80	14.61	29.71
1988	2431	29.42	7.54	28.94	23.02	44.51	16.44	31.70
1989	2459	31.65	8.03	29.30	24.51	43.92	18.37	31.32
1990	1467	20.56	4.64	27.88	24.99	49.63	18.09	28.96
1991	1583	15.33	5.51	33.05	29.63	55.09	21.49	34.35
1992	1629	17.43	4.95	32.99	25.63	46.92	18.57	36.04
1993	1634	21.34	6.27	33.74	26.81	48.36	19.99	36.51
1994	1477	20.29	5.73	32.18	26.18	47.44	20.14	34.29
1995	1345	18.52	3.91	34.42	26.86	47.04	21.71	36.65
1996	1281	19.21	3.73	36.51	31.32	50.73	24.77	38.07
1997	1379	19.23	3.98	38.26	30.94	55.85	23.35	40.43
1998	1359	18.8	4.00	37.84	34.10	57.59	26.91	38.88
1999	1230	18.6	3.96	38.65	34.49	56.33	27.85	39.68
2000	1184	18.73	3.46	39.34	33.03	57.84	26.50	40.75
2001	1085	25.51	5.28	39.07	34.01	54.68	29.20	40.34

Number of observations correspond to wage employees in the manufacturing sector. Average tariff weighted by the employment level in each industry. The informality rate does not include the public sector, agricultural and mining sectors. To split industries into small and large, we use information from the EPH about the size of the firm where each worker is employed. This information is categorical in the survey, the categories being 1 = 1 employee, 2 = 2 to 5, 3 = 5 to 15; 4 = 16 to 25; 5 = 26 to 50; 6 = 51 to 100; 7 = 101 to 500; 8 = 501 or more. We classify a firm as small when the size is 15 workers or less. We then define an industry as small when the share of workers employed in small firms is 0.5 or larger