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dc.contributor.authorAlbrecht, Jamesen_US
dc.contributor.authorNavarro, Lucasen_US
dc.contributor.authorVroman, Susanen_US
dc.date.accessioned2006-12-05en_US
dc.date.accessioned2010-07-07T09:50:35Z-
dc.date.available2010-07-07T09:50:35Z-
dc.date.issued2006en_US
dc.identifier.urihttp://hdl.handle.net/10419/33682-
dc.description.abstractIn many economies, there is substantial economic activity in the informal sector, beyond the reach of government policy. Labor market policies, which by definition apply only to the formal sector, can have important spillover effects on the informal sector. The relative sizes of the informal and formal sectors adjust, the skill composition of the workforce in the two sectors changes, etc. In this paper, we build an equilibrium search and matching model to analyze the effects of labor market policies in an economy with an informal sector. Our model extends Mortensen and Pissarides (1994) by allowing for ex ante worker heterogeneity with respect to formal-sector productivity. We analyze the effects of labor market policy on informal- and formal-sector output, on the division of the workforce into unemployment, informal-sector employment and formal-sector employment, and on wages. Finally, our model allows us to examine the distributional implications of labor market policy; specifically, we analyze how labor market policy affects the distributions of wages and productivities across formal-sector matches.en_US
dc.language.isoengen_US
dc.publisherIZA Bonnen_US
dc.relation.ispartofseriesIZA Discussion Papers 2141en_US
dc.subject.jelE26en_US
dc.subject.jelJ64en_US
dc.subject.jelJ65en_US
dc.subject.jelO17en_US
dc.subject.ddc330en_US
dc.subject.keywordsearchen_US
dc.subject.keywordmatchingen_US
dc.subject.keywordinformal sectoren_US
dc.titleThe effects of labor market policies in an economy with an informal sectoren_US
dc.typeWorking Paperen_US
dc.identifier.ppn512890447en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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