EconPapers    
Economics at your fingertips  
 

Labour Market Policies and the Informal Sector: A Segmented Labour Markets Analysis

Dürdane Şirin Saracoğlu ()
Additional contact information
Dürdane Şirin Saracoğlu: Department of Economics, METU

No 1705, ERC Working Papers from ERC - Economic Research Center, Middle East Technical University

Abstract: In this paper we develop a dynamic model of a multi-sector economy with an informal sector and segmented labour markets first to demonstrate how informal production and employment decline in transition towards the steady state, and second to analyse the impact of various labour market policies at the steady state. Our results primarily indicate that informal employment share increases with minimum wage, and decreases with reductions in the payroll taxes, moreover, reducing the tax imposed on employer is more effective in reducing the informal employment share, while reducing the tax imposed on employee is more effective in increasing consumer felicity.

Keywords: Segmented labour markets; informal employment; payroll taxes; minimum wage; dynamic modelling (search for similar items in EconPapers)
JEL-codes: C61 J42 O17 O41 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2017-05, Revised 2017-05
New Economics Papers: this item is included in nep-dcm, nep-iue and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://erc.metu.edu.tr/en/system/files/menu/series17/1705.pdf First version, 2017 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:met:wpaper:1705

Access Statistics for this paper

More papers in ERC Working Papers from ERC - Economic Research Center, Middle East Technical University Contact information at EDIRC.
Bibliographic data for series maintained by Erol Taymaz ().

 
Page updated 2020-07-03
Handle: RePEc:met:wpaper:1705