Efficiency in a search and matching economy with a competitive informal sector
We consider a dual labor market with a frictional formal sector and a competitive informal sector. We show that the size of the informal sector is generally too large compared to the optimal allocation of the workers. It follows that our results give a rationale to informality-reducing policies.
|Place of publication:||
Bonn Institute for the Study of Labor (IZA) 2012
|published in:||Discussion Paper Series, Forschungsinstitut zur Zukunft der Arbeit Vol. 6935|
|Data of publication:||2012|
Database information Databases - DBIS