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Wages and Informality in Developing Countries

Costas Meghir (), Renata Narita and Jean-Marc Robin ()

No 136024, Center Discussion Papers from Yale University, Economic Growth Center

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.

Keywords: Consumer/Household Economics; Labor and Human Capital; Production Economics; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Pages: 66
Date: 2012-09
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https://ageconsearch.umn.edu/record/136024/files/cdp1018.pdf (application/pdf)

Related works:
Journal Article: Wages and Informality in Developing Countries (2015) Downloads
Working Paper: Wages and Informality in Developing Countries (2015) Downloads
Working Paper: Wages and informality in developing countries (2013) Downloads
Working Paper: Wages and Informality in Developing Countries (2013) Downloads
Working Paper: Wages and Informality in Developing Countries (2012) Downloads
Working Paper: Wages and Informality in Developing Countries (2012) Downloads
Working Paper: Wages and Informality in Developing Countries (2012) Downloads
Working Paper: Wages and informality in developing countries (2012) Downloads
Working Paper: Wages and Informality in Developing Countries (2012) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:yaleeg:136024

DOI: 10.22004/ag.econ.136024

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