Regulation of entry, labor market institutions and the informal sector

Ulyssea, Gabriel

doi:10.1016/j.jdeveco.2009.07.001

Cited by 174 publications

(140 citation statements)

References 19 publications

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“…Table 6 shows the estimates for the job destruction and the job arrival rates with associated standard errors obtained using 500 bootstrap replications. 20 The estimated job destruction rates are three to five times as high in the informal sector as in the formal one. However, even informal jobs seem to be very stable, with an expected duration of nearly five years in the absence of job to job mobility.…”

Section: Resultsmentioning

confidence: 99%

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Wages and informality in developing countries

Meghir¹,

Narita²,

Robin

2012

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It is often argued that informal labor markets in developing countries promote growth by reducing the impact of regulation. On the other hand informality may reduce the amount of social protection offered to workers. We extend the wage-posting framework of Burdett and Mortensen (1998) to allow heterogeneous firms to decide whether to locate in the formal or the informal sector, as well as set wages. Workers engage in both off the job and on the job search. We estimate the model using Brazilian micro data and evaluate the labor market and welfare effects of policies towards informality.

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Section: Resultsmentioning

confidence: 99%

“…Unemployed 19 The elasticity of the matching function with respect to vacancies η is usually estimated in the range 0.3-0.5 (see, Petrongolo and Pissarides, 2001). 20 The unit of time is a month. Subscript 0 refers to unemployment, 1 refers to the formal sector and 2 to the informal.…”

Section: Resultsmentioning

confidence: 99%

Wages and informality in developing countries

Meghir¹,

Narita²,

Robin

2012

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“…With respect to developing countries and their relationship to institutions, one may look at the work by Ulyssea (2010) about Brazil, analyzing the effect of various labor market institutions and entry regulations prevailing in the formal sector on the size of the informal sector. The results indicate that the best approach to reduce the size of the informal sector is adopting policies, which reduce the costs of being formal and create the right incentives for companies and workers intending to switch to the formal sector.…”

Section: The Various Links Of Informalitymentioning

confidence: 99%

Informality and Formality: Fiscal Policy in DSGE Model

et al. 2014

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We develop a DSGE model of the Colombian economy to assess the effect of tax policy on informal employment and income distribution.The model recreates a small open economy, with persistent income inequality, a substantial degree of informality, and different possibilities of government intervention. This paper evaluates the consequences of government transfer payments to households with lower incomes. We find that although transfer payments have a positive effect on income distribution, financing them requires an adjustment in government finances (cut spending or increase revenue through the use of various taxes), which have negative effects on the economic as a whole.JEL Classification: E62, D58.

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“…Specifically, this perspective argues that firms, entrepreneurs, and workers decide to operate informally to avoid the additional costs created by excessive regulations and taxation (Chen, 2009). These researchers posit that the size of the informal economy depends on the intensity of economic regulations (De Soto, 1989;Moe, 2001, 2004;Loayza and Rigolini, 2011;Macias and Cazzavillan, 2009;Maloney, 2004;Ulyssea, 2010) and the quality of regulatory enforcement (Kus, 2010).…”

Section: Economic Development Regulation and The Informal Economymentioning

confidence: 99%

Peripheral accumulation in the world economy: A cross-national analysis of the informal economy

Roberts

2013

International Journal of Comparative Sociology

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The persistence and growth of the informal economy have puzzled researchers and challenged mainstream explanations of the development of the informal economy. This study utilizes a world-systems approach for explaining cross-national variation in the size of the informal economy for a sample of 74 developing and developed countries observed over a recent 8-year period (1999-2007). According to this approach, the informal economy is a characteristic of peripheral accumulation in the world economy and its development is driven by unequal exchange in international trade and foreign capital penetration. Based on estimates from random and fixed-effects regression models using multiple measures of world-system position, countries in the periphery and semi-periphery of the world economy have larger informal economies than core countries. More importantly, this difference in the development of the informal economy between the core, semi-periphery, and periphery is partially explained by the effects of international trade and foreign direct investment. Overall, the findings indicate that the development and persistence of the informal economy are driven by the structure of the world economy and processes of economic globalization.

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Regulation of entry, labor market institutions and the informal sector

Cited by 174 publications

References 19 publications

Wages and informality in developing countries

Wages and informality in developing countries

Informality and Formality: Fiscal Policy in DSGE Model

Peripheral accumulation in the world economy: A cross-national analysis of the informal economy

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