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Informal Sector in Uganda

Student: Awania Lorna julia

Supervisor: Anna Yurko

Faculty: International College of Economics and Finance

Educational Programme: Financial Economics (Master)

Year of Graduation: 2020

The main objective of this thesis is to investigate the characteristics of informal wage employment in Uganda and compare earnings differentials to formal wage employment using panel data. The empirical study uses descriptive statistics, and techniques such as multinomial logistic regression, and fixed effects regression. The data used is from the Uganda Bureau of Statistics (UBOS) Panel Survey spanning the years 2010 – 2016. The main finding is that there is a significant wage premium in favour of formal workers even after accounting for time-invariant individual characteristics. Evidence that there are more transitions into informal wage employment than out of it points toward some degree of labour market segmentation.

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