Housing informality and labor informality in space In search of the missing links

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.title[
# Housing informality and labor informality in space In search of the missing links
]
.author[
### .hbody[Gustavo A. García School of Finance, Economics and Government Universidad EAFIT <a href="mailto:ggarci24@eafit.edu.co" class="email">ggarci24@eafit.edu.co</a>]
]
.author[
### .hbody[Erika R. Badillo Faculty of Economics Universidad Autónoma Latinoamericana <a href="mailto:erika.badilloen@unaula.edu.co" class="email">erika.badilloen@unaula.edu.co</a>]
]
.author[
### .hbody[Juan Manuel Aristizábal Faculty of Accounting, Economic and Administrative Sciences Universidad de Manizales <a href="mailto:jm.aristizabal@umanizales.edu.co" class="email">jm.aristizabal@umanizales.edu.co</a>] 
]
.date[
### .hbody[20th IEA World Congress Medellín - Colombia 11-15 December 2023]
]

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# Outline

- [Motivation](#motivation)

- [Contribution](#contribution)

- [Relevant literature](#lite)

- [Data and descriptive evidence](#data)

- [Econometric model](#model)

- [Results](#results)

- [Conclusions](#conclusions)

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name: motivation
# Motivation
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- Many developing countries are characterized by the prevalence of housing informality, labor informality and informality of transport

- This triple informality in housing, employment and transport is an important factor driving the low levels in productivity and wellbeing observed in many cities in developing countries (Vargas et al., 2017; OECD, 2018; Ferreyra and Roberts, 2018; Azunre et al, 2021)

- Housing and labor informality are the phenomena with the highest incidence at the urban level and they are closely related to socioeconomic indicators such as poverty, inequality, quality of life and, in general, the development of cities and their productivity (UN-Habitat, 2016):

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# Motivation
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- The cities in developing countries are characterized by the existent of areas hosting low-income workers living in precarious conditions

- These lower incomes might induce people to live in informal settlements, so that economic vulnerability and precarious working conditions may be within the causes of the emergence of informal housing (Lombard and Mitlin, 2020)

- The precarious working conditions along with higher restrictions to access to the financial system that face informal workers are thought to be important mechanisms that explain the spatial choice of housing and its characteristics (Vargas et al., 2017)

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name: contribution
# Contribution
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- Despite the extensive literature on both housing informality and labor informality, there is a lack of evidence on the relationship between these two phenomena in space

- This paper aims to offer new evidence on the links between precarious housing conditions (informal housing) and limited access to quality employment (labor informality), considering the relationship and spatial dimension of these two phenomena

- Using data at the intra-urban level in Medellin (Colombia), we identified the effect of labor informality on housing informality through spatial simultaneous equation models, which take into account the relationship between informal housing and labor informality and the spatial dependence

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name: lite
# Relevant literature
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Several studies focus on analyzing the determinants of housing informality and labor informality separately, forgetting the interdependence between them

Among the few studies that simultaneously analyze these phenomena, they agree that precarious working conditions may be within the causes of precarious housing conditions

**Determinants of housing informality**

- UN-Habitat (2013): lag in infrastructure
- Inostroza et al. (2013): urban growth
- Bonet et al. (2016): labor informality
- Posada and Moreno (2019): labor informality, structure of the cities and price of land
- Posada (2018): population growth

**Determinants of labor informality**

- Boisjoly et al. (2017): public transport
- Del Carpio and Patrick (2020): growth of cities
- Gutierrez (2021): inequality
- Lombard et al. (2021): level of income

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# Data and descriptive evidence
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- Population: 2.6 millions (Colombia: 48 millions, Bogotá: 8 millions)
- Area: 380 `\(km^2\)` (Colombia: 1,141,748 `\(km^2\)`)
- Density: 6749 `\(km^2\)` (Bogotá: 4531 `\(km^2\)`)
- Unemployment: 8.6% (Colombia: 9.2%)
- Housing informality: 7% (Colombia: 22%)
- Labor informality: 44% (Colombia: 50%)
- Administrative division: 16 communes and 243 neighborhoods

<center><spam style="font-size:90%">**Figure 1. Study area: Medellín**
<img src="Figure1.png" width="60%" style="display: block; margin: auto;" />

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# Data and descriptive evidence
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- The data used in this paper came from the Quality of Life Survey (QLS) for Medellín in 2017

- This cross-section survey contains individual-level information on household characteristics, demographics, education, social security, labor market, and indicators of poverty and socioeconomic conditions

- The sample includes a total of 42806 individuals (12205 households)