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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)