The Indian labour market is characterized by a high level of informality, with large numbers of workers in poorly paid 'lower-tier' informal jobs, and somewhat better paid 'uppertier' informal jobs, which do not have the same benefits and security of tenure as formal jobs. We examine the...

The vast majority of firms in developing economies are micro and small enterprises owned by families whose members also provide the labour to the units. Often, they fail to grow in size even with the relaxation of credit constraints. In this paper, we show that frictions in the labour market...