Informal work in urban Mexico
Characteristics, dynamics, and workers’ preferences
This chapter presents a descriptive analysis of the labour market in urban Mexico, focusing on its heterogeneity across various employment statuses. It also studies the preferences of workers for formal wage employment. About half of the employed population are formally employed, almost a third are in lower-tier informal jobs, and the rest are in upper-tier informal jobs.
Most formal workers are wage employees. In contrast, one in three informal workers are self-employed. There is a clear job ladder and earnings fall as one moves down its rungs. Also, there is little employment mobility at the top (formal) and bottom (lower tier) of this ladder over the course of a year.
Finally, almost 80 per cent of informal workers declare it preferable to be employed in a formal job. This suggests that many of the urban informal are in this type of employment because of a lack of better options.