Efficiency in a search and matching economy with a competitive informal sector

Olivier Charlot, Franck Malherbet and Mustafa Ulus ()

Economics Letters, 2013, vol. 118, issue 1, 192-194

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.

Keywords: Search and matching models; Informality; Efficiency (search for similar items in EconPapers)
JEL-codes: E24 E26 J60 L16 O1 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Working Paper: Efficiency in a search and matching economy with a competitive informal sector (2013)
Working Paper: Efficiency in a Search and Matching Economy with a Competitive Informal Sector (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:118:y:2013:i:1:p:192-194

DOI: 10.1016/j.econlet.2012.10.017

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