We estimate the wage penalty associated with working in the South African informal sector. To this end we use a rich data set on non-self-employed males that allows one to accurately distinguish workers employed in the informal sector from those employed in the formal sector and link individuals...

We develop a model where workers may enter self-employment or search for jobs as employees and where there is heterogeneity across workers’ managerial ability. Workers with higher skills will manage larger firms while workers with low managerial ability will run smaller firms and will be in...

We estimate the impact of internal migration on local labour markets in Thailand. Using an instrumental variable approach based on weather and distance we estimate an exogenous measure of the net migration inflow into each region. Our results show that instrumenting for the possible endogeneity...

We develop a model where workers may enter self-employment or search for jobs as employees and where there is heterogeneity across workers’ managerial ability. Workers with higher skills will manage larger firms while workers with low managerial ability will run smaller firms and will be in...

We show theoretically that when larger firms pay higher wages and are more likely to be caught defaulting on labor taxes, then large-high wage firms will be in the formal and small-low wage firms will be in the informal sector. The formal sector wage premium is thus just a firm size wage...

We estimate the impact of internal migration on local labour markets in Thailand.Using an instrumental variable approach based on weather and distance we estimate an exogenous measure of the net migration in ow into each region. Our results show that instrumenting for the possible endogeneity of...

We develop a model where formal sector firms pay tax and informal ones do not, but informal firms risk incurring the penalty associated with non-compliance. Workers may enter self-employment or search for jobs as employees. Workers with higher managerial skills will run larger firms while...

This paper investigates the link between nationality of ownership and wage elasticities of labour demand at the level of the plant. In particular, we examine whether labour demand in multinationals becomes less elastic with respect to the wage if the plant has backward linkages with the local...

In monopsony models of the labour market either a minimum wage or an employment subsidy financed by a lump sum tax on profits can achieve the efficient level of employment and output. Incorporating working conditions into a monopsony model where higher wages raise firm labour supply, but less...

Foreign-owned firms have consistently been found to pay higher wages than domestic firms to what appear to be equally productive workers in both developed and developing countries alike. Although a number of studies have documented and some attempted to explain this stylized fact, the issue...