Two stylized representations are often found in the academic and policy literature on informality and formality in developing countries. The first is that the informal (or unregulated) sector is more competitive than the formal (or regulated) sector. The second is that contract enforcement is...

This paper proposes an overlapping generations multi‐sector model of the labor market for developing countries with three heterogeneities – heterogeneity within self‐employment, heterogeneity in ability, and heterogeneity in age. We revisit an iconic paradox in a class of multi‐sector...

This paper argues that after a quarter century of sharp and sustained increase, Chinese inequality is now plateauing and even turning down. The argument is made using a range of data sources and a range of measures and perspectives on inequality. The evolution of inequality is further examined...

This paper explores the question of structural transformation and income distribution through the eyes of the pioneer in such analysis, Simon Kuznets. It argues that his 1955 paper stands the test of time in providing insights which are relevant to understanding current phenomena like the...

This review is framed around the exploration of a central hypothesis: A shift in public investment towards secondary towns from big cities will improve poverty reduction performance. Of course the hypothesis raises many questions. What exactly is the dichotomy of secondary towns versus big...

Should public investment be targeted to big cities or to small towns, if the objective is to minimize national poverty? To answer this policy question we extend the basic Todaro-type model of rural-urban migration to the case of migration from rural areas to two potential destinations, secondary...

Standard income inequality indices can be interpreted as a measure of welfare loss entailed in departures from equality of outcomes, for egalitarian social welfare functions defined on the distribution of outcomes. But such a welfare interpretation has been criticized for a long time on the...

Rising income inequalities are widely debated in public and academic discourse. In this paper, we contribute to this debate by proposing a new family of measures of unfair inequality. To do so, we acknowledge that inequality is not bad per se, but that its underlying sources need to be taken...

The theory of fiscal and regulatory competition between jurisdictions is more advanced than its empirical testing. This is particularly true of labor regulation in general, and minimum wage regulation in particular, and especially so for developing countries. This paper utilizes the spatial lag...

The conventional justification for moving from income distribution to intergenerational mobility analysis is that the movie encompasses the snapshot and is normatively superior as the basis for assessing policy. Such a perspective underpins many an argument for shifting the focus from income...