Skip to main content

Table 5 Parameters estimated by simulated method of moments (SMM)

From: Pension schemes and labor supply in the formal and informal sector

Parameters estimated by simulated method of moments

Name

Symbol

Value

Standard deviation

Discount factor

β

0.9475

(0.0014)

Risk aversion

γ

1.2757

(0.0018)

Benefits B 1(S)

 Medium education

B 1(2)

0.4691

(0.0004)

 High education

B 1(3)

0.9382

(0.0002)

Home production in active life B 2(X X,S)

 Constant

b 22

100.9925

(5.589)

 Low education

b 21(1)

38.1481

(0.781)

 Medium education

b 21(2)

36.9016

(1.631)

 High education

b 21(3)

49.5058

(2.396)

 Low education

b 23(1)

43.465

(1.090)

 Medium education

b 23(2)

51.5392

(0.925)

 High education

b 23(3)

57.3335

(2.557)

Home production in retirement life B 3(S)

 SP

b 3

1838.1

(2.0)

 Low education

b 31(1)

1060.395

(1.87)

 Medium education

b 31(2)

3182.1625

(48.91)

 High education

b 31(3)

2113.5710

(112.4)

Cost of entering in formality

 Age multiplier

Π

97.6199

(4.09)

 Informal–formal (low education)

ϕ 11(1)

1.18

(0.0141)

 Informal–formal (medium education)

ϕ 11(2)

0.591

(0.0)

 Informal–formal (high education)

ϕ 11(3)

0.0004

(0.0)

 Unemployed–formal (low education)

ϕ 12(1)

45.044

(1.22)

 Unemployed–formal (medium education)

ϕ 12(2)

4.504

(0.12)

 Unemployed–formal (high education)

ϕ 12(3)

0.015

(0.0)

Shocks

 Std. deviation informal

σ i

0.3602

(0.00)

 Std. deviation formal

σ f

0.2109

(0.00)