The Economist presented a study on the costs of transport and labor mobility

Investment in infrastructure is key for reducing labor informality, says Ricardo Hausmann.

• In developing countries, workers travel very long distances to get to work, which constitutes a sort of “tax” on work.
• In the case of Bogotá, informality is closely linked to travel times to companies, the study concluded.
• “Informality ages the PAYGO pension system,” said the economist.

Cartagena, April 13 2018. The renowned Venezuelan economist Ricardo Hausmann, one of the leading experts in economic development, presented the main conclusions of a study on the costs of transport and labor mobility in Bogotá, and its negative impact on the creation of formal jobs.

According to the economist, this study confirms his initial hypothesis of how costly long hauls to work can be for productivity and formal employment, becoming a kind of tax on work and a hindrance to development. “People are not willing to get into a traffic jam, and prefer setting up their stalls close to home, willingly paying the price for remaining in the informal economy” said the expert.

He added that “The cheapest land in Bogota is the most outlying land.  People with the lowest wages pay the highest transportation costs.” Hausmann stressed the importance of focusing the investment in cities on infrastructure. The government should design projects and then hand them over to the private sector to execute them.”

Hausmann highlighted the fact that the operating phases of projects are particularly suited for investment by the pension funds.  They are long-term, low risk and safe return assets.

Within the framework of this Congress, the National Trade Union Council and the Institute of Political Science praised the Venezuelan economist for his important work in the construction and consolidation of democracy in Latin America.

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The Economist presented a study on the costs of transport and labor mobility

Investment in infrastructure is key for reducing labor informality, says Ricardo Hausmann.

• In developing countries, workers travel very long distances to get to work, which constitutes a sort of “tax” on work.
• In the case of Bogotá, informality is closely linked to travel times to companies, the study concluded.
• “Informality ages the PAYGO pension system,” said the economist.

Cartagena, April 13 2018. The renowned Venezuelan economist Ricardo Hausmann, one of the leading experts in economic development, presented the main conclusions of a study on the costs of transport and labor mobility in Bogotá, and its negative impact on the creation of formal jobs.

According to the economist, this study confirms his initial hypothesis of how costly long hauls to work can be for productivity and formal employment, becoming a kind of tax on work and a hindrance to development. “People are not willing to get into a traffic jam, and prefer setting up their stalls close to home, willingly paying the price for remaining in the informal economy” said the expert.

He added that “The cheapest land in Bogota is the most outlying land.  People with the lowest wages pay the highest transportation costs.” Hausmann stressed the importance of focusing the investment in cities on infrastructure. The government should design projects and then hand them over to the private sector to execute them.”

Hausmann highlighted the fact that the operating phases of projects are particularly suited for investment by the pension funds.  They are long-term, low risk and safe return assets.

Within the framework of this Congress, the National Trade Union Council and the Institute of Political Science praised the Venezuelan economist for his important work in the construction and consolidation of democracy in Latin America.

Download