Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/200512
Authors: 
Mandal, Biswajit
Ghosh, Sujata
Year of Publication: 
2019
Series/Report no.: 
GLO Discussion Paper No. 367
Abstract: 
Effects of different reformatory policies have always been a pulsating concern for the researchers and policy makers. Considering this concern, this paper attempts to check various effects of reformatory policies such as labor market reform, tariff cut, change in subsidy, bureaucratic reform in a typical small open economy comprising of both formal and informal sectors. It has been found that the implications of labor market reform and tariff liberalization for factor prices and wage disparity are distinctly opposite. However, skilled labor of the economy benefits from both labor market reform and export subsidy. Next we extend the basic model to bring in related corruption in the informal sector for its illegal nature. This calls for the existence of a sector which helps hassle free informal production. There we find that unskilled workers lose owing to both bureaucratic reform and labor market reform. Nevertheless, though traditionally labor market reform is supposed to harm workers, wage disparity gets ameliorated whereas tariff reform leads to worsening of it.
Subjects: 
International Trade
Wages
General Equilibrium
Economic Policy
Informal Sector
Extortion
JEL: 
F1
J31
D5
F11
F68
D73
Document Type: 
Working Paper

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