Rethinking the informal labour from an evolutionary point of view

Bilge Ozturk Goktuna and Renginar Dayangac

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2011, vol. 40, issue 5, 609-615

Abstract: The model presents the dynamics and the equilibrium of an overlapping generation economy when there is informal employment, a pension system and altruistic agents. The model inspires from stylised facts on developing and Euro-Mediteranean countries where family plays a central role in risk insurance. The rational is emphasised by lower costs compared to private and public insurance systems. Given an initial distribution of the informally employed individuals, the model captures the effects of social security decisions and anticipated bequests on the preference of the agents for formal or informal employment. The impact of fiscal policies on the distribution of employment to formal and informal categories is analysed through the political competition. We show that opportunist behaviour would amplify the relative size of the informal employment.

Keywords: Evolutionary dynamics; Informal employment; Public social insurance; Bequests; Political competition (search for similar items in EconPapers)
JEL-codes: C73 E26 H31 J32 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:40:y:2011:i:5:p:609-615

DOI: 10.1016/j.socec.2011.04.017

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