One of the key factors that affects the extent to which changes in labour demand affect other macroeconomic variables, such as wage inflation, is the degree of matching between potential employees and available jobs. The pool of potential employees is usually measured as the pool of unemployed...

Informality is at the center of the economic debate in Colombia, fueled by the high level prevalent in the country and its substantial increase during the 1990s. We study the effect of labor market rigidities, namely the increase in non-wage costs and the minimum wage on the size of the informal...