Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98211
Authors: 
Meghir, Costas
Narita, Renata
Robin, Jean-Marc
Year of Publication: 
2012
Series/Report no.: 
Center Discussion Paper, Economic Growth Center 1018
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 labo market and welfare effects of policies towards informality.
Subjects: 
Informality
Unemployment
Job Search
Wage Posting
Equilibrium wage distributions
On the Job Search
Method of Moments
Informality
Unemployment
Job Search
Wage Posting
Equilibrium wage distributions
On the Job Search
Method of Moments
JEL: 
J24
J3
J42
J6
O17
Document Type: 
Working Paper

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