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...

The various channels through which a reduction in the cost of offshoring can improve wages in a developed country are by now well understood. But does a similar reduction in the offshoring cost also benefit workers in the world's factories in developing countries? Using a parsimonious...

We study the impact of tax and minimum wage reforms on the incidence of informality. To gauge the incidence of informality, we use measures of the extent of tax evasion, the extent of minimum wage non-compliance, and the size of the informal workforce. Our approach allows us to examine (i) the...

We explore three hitherto poorly understood characteristics of the human trafficking market - the cross-border ease of mobility of traffickers, the relative bargaining strength of traffickers and final buyers, and the elasticity of buyers' demand. In a model of two-way bargaining, the exact...

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...

Economic theory predicts that dishonesty thrives in secrecy. Yet, team-based decisions are ubiquitous in public policy-making. How does teamwork influence the tendency for selfdealings when public servants-both honest and corrupt-must work together to make decisions under the veil of...

This paper unpacks the role of the domestic content of imports as a novel source of policy interdependence along the global supply chain. We show how a rise in local contents embodied in imports can skew national trade policy preferences, and pull upstream and downstream countries in asymmetric...

We develop and estimate a theory-consistent gravity model for interregional migration flows in the presence of unemployment. Micro-founded in a setting where search friction regulates labor market transitions, we derive a migration gravity equation for bilateral mobility that embodies a...

Developing countries are often seen as unquestionable beneficiaries in the phenomenal rise of global value chains in international trade. Offshoring-the cross-border trade in intermediate goods and services which facilitate country-level specialization in subsets of production tasks-enables an...

This paper studies the education gradient associated with health reporting errors for two highly prevalent non-communicable diseases among older adults in India. We leverage a novel data set-the Longitudinal Aging Study in India (2017-18) panel survey-to unpack the sources of health reporting...