Labour Informality, Selective Migration, and Productivity in General Equilibrium

Huikang Ying

Bristol Economics Discussion Papers from School of Economics, University of Bristol, UK

Abstract: This paper studies the interactions between urban labour informality and selective migration, and explores the consequences of productivity changes at both sectoral and individual levels. It proposes a general equilibrium model with heterogeneous workers to characterize the sizable agriculture sector and urban informality in developing economies, and discusses implications for wages and inequality. The model links the size of the urban informal sector to the distributions of individual productivity endowments. The finding suggests that improving average individual skills is an efficient way to alleviate urban underemployment. Equilibrium responses also indicate that changes in labour markets have only modest effects on wages and inequality.

Keywords: Rural-urban migration; informal sector; productivity changes; wage inequality (search for similar items in EconPapers)
JEL-codes: J24 O15 O17 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2015-02-04
New Economics Papers: this item is included in nep-dge, nep-eff, nep-iue, nep-mig and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:bri:uobdis:15/653

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