Carneiro, Rafael Dix; Goldberg, Pinelopi K.; Meghir, Costas - National Bureau of Economic Research - 2021
We build an equilibrium model of a small open economy with labor market frictions and imperfectly enforced regulations. Heterogeneous firms sort into the formal or informal sector. We estimate the model using data from Brazil, and use counterfactual simulations to understand how trade affects...
