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Title:Efficiency in a search and matching economy with a competitive informal sector PDF Logo
Authors:Charlot, Olivier
Malherbet, Franck
Ulus, Mustafa
Issue Date:2012
Series/Report no.:Discussion Paper Series, Forschungsinstitut zur Zukunft der Arbeit 6935
Abstract:We consider a dual labor market with a frictional formal sector and a competitive informal sector. We show that the size of the informal sector is generally too large compared to the optimal allocation of the workers. It follows that our results give a rationale to informality-reducing policies.
Subjects:search and matching models
informality
efficiency
JEL:E24
E26
J60
L16
O1
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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