Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/91534
Authors: 
Meghir, Costas
Narita, Renata
Robin, Jean-Marc
Year of Publication: 
2012
Series/Report no.: 
IFS Working Papers W12/16
Abstract: 
It is often argued that informal labor markets in developing countries promote growth by reducing the impact of regulation. On the other hand informality may reduce the amount of social protection offered to workers. We extend the wage-posting framework of Burdett and Mortensen (1998) to allow heterogeneous firms to decide whether to locate in the formal or the informal sector, as well as set wages. Workers engage in both off the job and on the job search. We estimate the model using Brazilian micro data and evaluate the labor market and welfare effects of policies towards informality.
Subjects: 
Wages
informality
developing countries
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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