Informal Wage, Informal Price and Extortion under Migration and Tariff Reform

Biswajit Mandal and Saswati Chaudhuri

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we propose a theoretical model where formal and informal sectors co-exist in tandem. Trade union segregates some labor from being formal. Capital is not allowed to freely move between formal and informal sectors. Using this sort of framework it has been shown that immigration of unskilled workers reduces the return to informal labor and makes the informal good relatively cheaper. A tariff slash also impinges on similar kind of results. In both the cases informal capitalists gain. Moreover, what is more striking is that both migration and tariff reform are equally bad for the economy as a whole since these policies enhance the ‘unproductive’ element or labor in the society which is really costly as these laborers could have been used to produce some more consumable commodities.

Keywords: International Trade; Corruption/Extortion; Informal sector; Migration; General Equilibrium. (search for similar items in EconPapers)
JEL-codes: D5 D73 F11 O17 R23 (search for similar items in EconPapers)
Date: 2010-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/28704/1/MPRA_paper_28704.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/28961/1/MPRA_paper_28961.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/34240/1/MPRA_paper_34240.pdf revised version (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:pra:mprapa:28704

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter (winter@lmu.de).