Do economic reforms hurt or help the informal labor market?

Saibal Kar ()

IZA World of Labor, 2016, No 263, 263

Abstract: The evidence is mixed on whether informal labor in developing countries benefits from trade and labor market reforms. Reforms lead to higher wages and improved employment conditions in the informal sector in some cases, and to the opposite effect in others. At a cross-country level, lifting trade protection boosts informal-sector employment. The direction and size of the impacts on informal-sector employment and wages are determined by capital mobility and the interactions between trade and labor market reforms and public policies, such as monitoring the formal sector. To guarantee best practice policymakers need to take these interdependencies into account.

Keywords: economic reforms; informal labor; governance (search for similar items in EconPapers)
JEL-codes: F13 J23 J31 O17 (search for similar items in EconPapers)
Date: 2016
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