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:	2012-10
Authors:	Charlot, Olivier ; Malherbet, Franck ; Ulus, Mustafa
Institutions:	Institute for the Study of Labor (IZA)
Subject:	search and matching models \| informality \| efficiency

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Extent:	application/pdf
Series:	IZA Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	published in: Economic Letters, 2013, 118(1), 192-194 Number 6935 9 pages
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:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010744669