- A Information on Data Sources A.1 Colombia Our main data source is the administrative data PILA (the Integrated Report of Social Security Contributions) , managed by the Colombia Ministry of Health and made accessible at the Colombian Atlas of Economic Complexity. It contains information on formal employment by firms, municipalities and industries for 2008-2013. All types of sectors, including goods and services, are included (note that we use the terms 'sector' and 'industry' interchangeably). We compute the monthly average number of individuals per city per industry that contributed to the social security system - but were not self-employed. We call this the formal employment for a given industry and city. We use data aggregated at four-digit industry codes, using ISIC (revision 3.0) with 390 industries, and 62 cities.
Paper not yet in RePEc: Add citation now
- • GDP per capita in 2011 is computed from GDP estimates by municipality by DANE. No earlier estimates are available.
Paper not yet in RePEc: Add citation now
- • Government capabilities, higher education and transportation infrastructure for 2013 (the earliest year available) are taken from Consejo Privado de Competitividad and Universidad del Rosario.
Paper not yet in RePEc: Add citation now
- • Government spending shock is the change between 2008 and 2013 in total government spending (in 2008 prices) per working-age person. It is computed from municipality-level government spending data compiled by CEDE.
Paper not yet in RePEc: Add citation now
- • Oil producing city, a binary variable, which takes the value of one if the city has more than one oil well in production per thousand inhabitants. Oil well data refers to 2014, as reported by Ecopetrol (the Colombian hydrocarbon company) for their own internal records.
Paper not yet in RePEc: Add citation now
- • Sectoral demand shocks, sdsc, is a Bartik-style measure (see McGuire and Bartik, 1991) that summarizes for each city the mix of nationwide sectoral demand shocks facing the city. It is computed as sdsc = FORc ∑ i fempc,i(2008) fempc(2008) gi,c (7) where gi,c = log[fempi(2013)] − log[fempi(2008)] is growth of employment of industry i excluding employment in industry i in city c. In other words, here fempi = ∑j∈J fempi,j with set J containing all cities except city c.
Paper not yet in RePEc: Add citation now
Acemoglu, D., GarcÃa-Jimeno, C., Robinson, J. A., 2015. State capacity and economic development: A network approach. The American Economic Review 105 (8), 2364--2409.
Auerswald, P., Kauffman, S., Lobo, J., Shell, K., 2000. The production recipes approach to modeling technological innovation: An application to learning by doing. Journal of Economic Dynamics and Control 24 (3), 389--450.
- Barahona, M., Pecora, L. M., 2002. Synchronization in small-world systems. Physical Review Letters 89.5, 54101.
Paper not yet in RePEc: Add citation now
Barro, R. J., Sala-i Martin, X., 2003. Economic Growth, 2nd Edition. MIT Press.
- Beinhocker, E. D., 2006. The origin of wealth: Evolution, complexity, and the radical remaking of economics. Harvard Business Press.
Paper not yet in RePEc: Add citation now
- Brin, S., Page, L., 1998. The anatomy of a large-scale hypertextual web search engine. Computer networks and ISDN systems 30 (1), 107--117.
Paper not yet in RePEc: Add citation now
Busso, M., Fazio, M. V., Algazi, S. L., 2012. (In) formal and (Un) productive: The productivity costs of excessive informality in Mexico. IDB Working Paper No. IDB-WP-341.
- Castells, M., Portes, A., 1989. The informal economy: Studies in advanced and less developed countries. John Hopkins University Press, Ch. World underneath: The origins, dynamics, and effects of the informal economy.
Paper not yet in RePEc: Add citation now
- CEDE, 2016. Colombian data on government spending.
Paper not yet in RePEc: Add citation now
- Cities are defined using the methodology of Duranton (2013). Applying his algorithm to population and commuting data by municipality from the 2005 Census by DANE (National Statistics Office) we obtain 19 urban areas that consist of two or more municipalities, comprising a total of 115 municipalities. Similar to the standards of the US Office of Management and Budget (OMB) for metropolitan area delineations, we add to these 19 urban areas another 43 individual municipalities with urban populations above 50,000 inhabitants in 2008 according to DANE, for a total of 62 cities.
Paper not yet in RePEc: Add citation now
- Colombian Atlas of Economic Complexity, 2016. Colombian formal employment and industry/region mapping.
Paper not yet in RePEc: Add citation now
- De Soto, H., 2000. The mystery of capital: Why capitalism triumphs in the West and fails everywhere else. Basic Books.
Paper not yet in RePEc: Add citation now
- Delvenne, J.-C., Yaliraki, S., Barahona, M., 2010. Stability of graph communities across time scales. Proceedings of the National Academy of Sciences 107, 12755--12760.
Paper not yet in RePEc: Add citation now
- Doeringer, P. B., Piore, M. J., 1975. Unemployment and the dual labor market. The Public Interest (38), 67--79.
Paper not yet in RePEc: Add citation now
- Duranton, G., 2013. Delineating metropolitan areas: Measuring spatial labour market networks through commuting patterns. Processed, Wharton School, University of Pennsylvania.
Paper not yet in RePEc: Add citation now
Duranton, G., Puga, D., 2001. Nursery cities: Urban diversity, process innovation, and the life cycle of products. American Economic Review, 1454--1477.
Duranton, G., Puga, D., 2004. Micro-foundations of urban agglomeration economies. Handbook of regional and urban economics 4, 2063--2117.
Fields, G., 1975. Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs. Journal of development economics 2 (2), 165--187.
Frenken, K., Boschma, R. A., 2007. A theoretical framework for evolutionary economic geography: industrial dynamics and urban growth as a branching process. Journal of Economic Geography 7, 635--649.
Frenken, K., Van Oort, F., Verburg, T., 2007. Related variety, unrelated variety and regional economic growth. Regional Studies 41 (5), 685--697.
Friedrichs, J., 1993. A theory of urban decline: Economy, demography and political elites. Urban Studies 30 (6), 907--917.
- Ghani, E., Kanbur, R., 2013. Urbanization and (in) formalization. World Bank Policy Research Working Paper (6374).
Paper not yet in RePEc: Add citation now
Glaeser, E. L., Kallal, H. D., Scheinkman, J. A., Shleifer, A., 1992. Growth in cities. Journal of Political Economy 100 (6), 1126--1152.
Gomez-Lievano, A., Patterson-Lomba, O., Hausmann, R., 2017. Explaining the prevalence, scaling and variance of urban phenomena, In Press at Nature Human Behaviour.
- Hart, K., 1973. Informal income opportunities and urban employment in Ghana. The Journal of Modern African studies 11 (01), 61--89.
Paper not yet in RePEc: Add citation now
- Hausmann, R., Cunningham, B., Matovu, J. M., Osire, R., Wyett, K., 2014a. How should Uganda grow? Available at SSRN 2439277.
Paper not yet in RePEc: Add citation now
- Hausmann, R., Hidalgo, C., Bustos, S., Coscia, M., Chung, S., Jimenez, J., Simoes, A., Yildirim, M., 2011. The atlas of economic complexity: Mapping paths to prosperity. Harvard University Center for International Development, MIT Media Lab.
Paper not yet in RePEc: Add citation now
- Hausmann, R., Hidalgo, C., October 2011. The network structure of economic ouput. Journal of Economic Growth 16, 309--342.
Paper not yet in RePEc: Add citation now
Hausmann, R., Hidalgo, C., Stock, D. P., Yildirim, M. A., 2014b. Implied comparative advantage. HKS Working Paper No. RWP14003.
- Hausmann, R., Klinger, B., 2006. The evolution of comparative advantage: the impact of the structure of the product space. Center for International Development and Kennedy School of Government, Harvard University.
Paper not yet in RePEc: Add citation now
Hidalgo, C. A., Klinger, B., Barabási, A.-L., Hausmann, R., 2007. The product space conditions the development of nations. Science 317, 482--487.
Hidalgo, C., Hausmann, R., 2009. The building blocks of economic complexity. Proc Natl Acad Sci USA 106 (26), 10570--10575.
- IBGE, 2016. Brazillian population data.
Paper not yet in RePEc: Add citation now
- Jones, C. I., March 2002. Sources of U.S. Economic Growth in a World of Ideas. The American Economic Review 92 (1), 220--239.
Paper not yet in RePEc: Add citation now
Jones, C. I., Romer, P. M., January 2010. The new kaldor facts: Ideas, institutions, population, and human capital. American Economic Journal: Macroeconomics 2, 224--245.
Klimek, P., Hausmann, R., Thurner, S., 2012. Empirical confirmation of creative destruction from world trade data. PloS one 7 (6).
Kremer, M., 1993a. The o-ring theory of economic development. The Quarterly Journal of Economics, 551--575.
Kremer, M., August 1993b. Population growth and technological change: One million B.C. to 1990. The Quarterly Journal of Economics 108 (3), 681--716.
La Porta, R., Shleifer, A., 2014. Informality and development. The Journal of Economic Perspectives, 109--126.
- Levy, S., 2010. Good intentions, bad outcomes: Social policy, informality, and economic growth in Mexico. Brookings Institution Press.
Paper not yet in RePEc: Add citation now
- Lewis, W. A., 1954. Economic development with unlimited supplies of labour. The Manchester School 22 (2), 139--191.
Paper not yet in RePEc: Add citation now
- Lovász, L., 1993. Random walks on graphs: A survey. Combinatorics, Paul Erdős is eighty 2 (1), 1--46.
Paper not yet in RePEc: Add citation now
Lucas, R. E., 1978. On the size distribution of business firms. The Bell Journal of Economics, 508--523.
Lucas, R., July 1988. On the mechanics of economic development. Journal of Monetary Economics 22 (1), 3--42.
Maloney, W. F., 2004. Informality revisited. World Development 32 (7), 1159--1178.
McGuire, T. J., Bartik, T. J., 1991. Who benefits From state and local economic development policies? JSTOR.
- Mexican Atlas of Economic Complexity, 2016. Mexican formal employment and industry/region mapping.
Paper not yet in RePEc: Add citation now
Neffke, F., Henning, M., 2013. Skill relatedness and firm diversification. Strategic Management Journal 34 (3), 297--316.
Neffke, F., Henning, M., Boschma, R., 2011a. How do regions diversify over time? industry relatedness and the development of new growth paths in regions. Economic Geography 87 (3), 237--265.
Neffke, F., Henning, M., Boschma, R., Lundquist, K.-J., Olander, L.-O., 2011b. The dynamics of agglomeration externalities along the life cycle of industries. Regional Studies 45 (1), 49--65.
- Nelson, R., Winter, S., 1982. An evolutionary theory of economic change. The Belknap Press of Harvard University Press, Cambridge.
Paper not yet in RePEc: Add citation now
O'Clery, N., Lora, E., 2016. City size, distance and formal employment creation. CAF (Latin American Development Bank) Working Paper.
Perry, G. (Ed.), 2007. Informality: Exit and exclusion. World Bank Publications.
- Pickett, S., Cadenasso, M., Grove, J., Boone, C. G., Groffman, P. M., Irwin, E., Kaushal, S. S., Marshall, V., McGrath, B. P., Nilon, C., Pouyat, R., Szlavecz, K., Troy, A., Warren, P., October 2011. Urban ecological systems: Scientific foundations and a decade of progress. Journal of Environmental Management 92, 331--362.
Paper not yet in RePEc: Add citation now
Romer, P. M. P., October 1990. Endogenous technological change. Journal of Political Economy 98 (5), S71--S102.
Romer, P. M., October 1986. Increasing returns and long-run growth. The Journal of Political Economy 94 (5), 1002--1037.
- Rosenthal, S., Strange, W., 2006. The micro-empirics of agglomeration economies. A Companion to Urban Economics, 7--23.
Paper not yet in RePEc: Add citation now
- Rozenfeld, H. D., Rybski, D., Andrade, J. S., Batty, M., Stanley, H. E., Makse, H. A., 2008. Laws of population growth. Proceedings of the National Academy of Sciences 105 (48), 18702--18707.
Paper not yet in RePEc: Add citation now
Rozenfeld, H. D., Rybski, D., Gabaix, X., Makse, H. A., 2009. The area and population of cities: New insights from a different perspective on cities. Tech. rep., National Bureau of Economic Research.
- Schwab, K., Sala-i MartÃn, X., 2013. The global competitiveness report 2013--2014: Full data edition. In: World Economic Forum. p. 551.
Paper not yet in RePEc: Add citation now
- Singer, H. W., 1973. Employment, incomes and equality: A strategy for increasing productive employment in Kenya. International Labour Office.
Paper not yet in RePEc: Add citation now
- The dependent variable in the regressions of Tables 1, 2, 3 and 4 is the change in the formality rate as defined in the text, and computed from the social security system data mentioned above and working age population data (see below). The main explanatory variable is complexity potential, computed from the PILA data as explained in the text. Controls in the regressions of said tables, in addition to the initial level of the formality rate, are computed as follows: • Working age population in 2008, defined as population 15 or older, is calculated from population data by age groups and municipality estimated by DANE. This variable (for 2008 and 2013) is also used to compute the formality rate by city.
Paper not yet in RePEc: Add citation now
- The working age population data (by municipality/age group) is from census data 2010. A list of the 82 most populous cities based on the population of the municipality where the city is located was obtained from IBGE.
Paper not yet in RePEc: Add citation now
- This data was collected for 26 of the 33 Colombian departments following the methodology of the Global Competitiveness Report by Schwab and Sala-i MartÃn (2013). We have attributed the data for the corresponding department to 55 cities (the departments of the remaining seven cities were not covered). A.2 Mexico, Brazil and USA Data on formal employment for Mexico is publicly available (by municipality) from the Mexican Atlas of Economic Complexity also produced by the Centre for International Development at Harvard (accessible at www.complejidad.datos.gob.mx). Population by age groups is also publicly available for Mexico from INEGI. We use the official definition of `Metropolitan Zones' from Conapo, for which there are 59 zones. Formal employment data for Brazil comes from RAIS (by municipality) via Dataviva (www.dataviva.info).
Paper not yet in RePEc: Add citation now
- URL ftp://ftp.ibge.gov.br/Estimativas_de_Populacao/Estimativas_2014/estimativa_dou_2014.pdf INEGI, 2016. Mexican population data.
Paper not yet in RePEc: Add citation now
- URL http://compite.com.co/ County Business Patterns, 2016. United States formal employment data.
Paper not yet in RePEc: Add citation now
- URL http://complejidad.datos.gob.mx/ Mohar, B., 1991. The Laplacian spectrum of graphs. Graph theory, Combinatorics, and Applications 2, 871 -- 898.
Paper not yet in RePEc: Add citation now
- URL http://dataviva.info/ De Soto, H., 1990. The other path: The invisible revolution in the third world.
Paper not yet in RePEc: Add citation now
- URL http://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml US Office of Management and Budget, 2016. United States definition of metropolitan areas.
Paper not yet in RePEc: Add citation now
- URL http://www.census.gov/population/metro/data/metrodef.html Weil, D. N., 2012. Economic growth, 3rd Edition. Prentice hall, New York.
Paper not yet in RePEc: Add citation now
- URL http://www.conapo.gob.mx/es/CONAPO/Zonas_metropolitanas_2010 Consejo Privado de Competitividad, 2016. Colombian competitiveness indices.
Paper not yet in RePEc: Add citation now
URL http://www.inegi.org.mx/est/contenidos/Proyectos/encuestas/hogares/regulares/enoe/ Jones, C. I., 1995. R&D-based models of economic growth. Journal of Political Economy 103 (4), 759--784.
- URL https://datoscede.uniandes.edu.co/ Chen, M. A., 2012. The informal economy: Definitions, theories and policies. Women in informal economy globalizing and organizing: WIEGO Working Paper 1.
Paper not yet in RePEc: Add citation now
- US Census, 2016. United States working age population by county.
Paper not yet in RePEc: Add citation now