In this article we use a multivariate framework to estimate net profits and levels of capital and labor for informal Mexican microfirms had they been formal. We estimate a Roy model to simultaneously model three different microfirm responses conditional on the sector (formal or informal) choice....

In this article we use a multivariate framework to estimate net profits and levels of capital and labor for informal Mexican microfirms had they been formal. We estimate a Roy model to simultaneously model three different microfirm responses conditional on the sector (formal or informal) choice....

In this article we use a joint framework to investigate the effects on profit and size of Mexican microfirms from moving from the informal to the formal sector of the economy. Our analysis uses a multivariate Roy model, which allows us to study simultaneously the interaction between the...