The dynamics of the informal sector are largely unknown in many developing countries. This is something that this research is out to study. One dynamic aspect of the labor market is the mobility across different sectors, in particular, across the formal/informal divide. The project addresses this issue in the context of both individual workers and firms. This is the first study on transitions of individual workers and firms between formal/informal sectors using panel data from Egypt and Jordan. The results are important for designing policies to address labor informality and its adverse impact on the labor markets in Egypt and Jordan.
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