as a repository of workers unable to find employment in the formal sector who often have to cope with lower wages, this sector includes the self-employed _(cuenta propia)_ and workers in small firms lacking social protection schemes such as health insurance and work benefits, albeit there is no consensus on precise definitions. Although this view has recently been challenged,<sup>1</sup> ' we also contrast the evolution of informal and formal wages as another potential dimension of intramale economic marginalization'<sup>2</sup> .

Overall, we shall interpret as key evidence of wage marginalization: 1) a systematic decline, in the level of wages of a given group of workers relative to overall wage trends, and 2) a change in the wage distribution, not compensated by an increase in wage levels, that iincreases the proportion of workers (in the population or within a given group) in low-wage jobs.

We do not attempt to address the considerably more difficult task of sorting out the causal factors underlying the observed labor market outcomes. This would require a rather different approach. The results below do provide a rich account of key trends that require further exploration in future research.

# 3.2 **Data**

We use available data from national household surveys covering urban areas for each initial and end year in the relevant periods. These are the _Encuesta Permanente de Hogares_ (EPH) in Argentina (1988, 1997) covering Greater Buenos Aires, _the Pesquisa Nacional por Amnostra de Domicilios_ (PNAD) in Brazil and _the Encuesta de Hogares de Prop6sitos Multiples_ (EHPM) in Costa Rica (1989, 1995).'3 The analysis only considers males who report being salaried workers or self-employed _(cuenta propia)_ and age 15 to 70, thereby excluding owners of small firms and unpaid family workers. 1<sup>4</sup> The wage analysis is based on hourly wages for men who report a positive number of hours of work and earnings in the main occupation. Real wages are computed in 1988 pesos in Argentina, 1989 pesos in Costa Rica, and 1989 US dollars in

> "See Maloney (1998a, 1998b) for a discussion of the labor market segmentation hypothesis in LDCs. 12 Regressions are run on the pooled sample of salaried and self-employed workers. Although this restricts sectoral wage differentials to be independent of observable characteristics, it allows a direct assessment of the relative wage performance of workers across sectors after adjusting for such characteristics. Moreover, the smaller sizes cf the informal samples may result in noisier statistical inferences.

13 In Argentina, we merge the May and October waves of the EPH surveys in each year to obtain bigger sample sizes. In Brazil, the 1995 PNAD does not allow to distinguish between urban and rural areas. In order to enhance comparability over time, the 1995 sample for Brazil covers only the largest metropolitan centers (Rio, Sao Paulo, Minas Gerais, Parana, Pernambuco, Bahia and Ceara) and exclude agricultural workers. For Costa Rica we only include individuals living in metropolitan areas.

**14** The relevant population for inference purposes is the employed male population, which may or may not be representative of the whole male population of workers in the labor force (including the unemployed). However, biases arising from self-selection into the labor force are typically not as big a concern for men as for women. Atterapts to correct for self-selection into to the labor force or for correlation between unobservable determinants of unemployment spells and wage equation regressors using parametric sample selection methods (e.g., Heckman, 1979) are increasingly recognized as unsatisfactory due to the sensitivity of the approach to statistical assumptions.

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