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.

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Year of publication:	2012
Authors:	Charlot, Olivier ; Malherbet, Franck ; Ulus, Mustafa
Publisher:	Bonn : Institute for the Study of Labor (IZA)
Subject:	Dualer Arbeitsmarkt \| Matching \| Informeller Sektor \| Allokationseffizienz \| Theorie \| search and matching models \| informality \| efficiency

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Series:	IZA Discussion Papers ; 6935
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	728401517 [GVK] hdl:10419/67306 [Handle]
Classification:	E24 - Employment; Unemployment; Wages ; E26 - Informal Economy; Underground Economy ; J60 - Mobility, Unemployment, and Vacancies. General ; L16 - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure; Industrial Price Indices ; O1 - Economic Development
Source:	EconStor

Persistent link: https://www.econbiz.de/10010290000