Efficiency in a search and matching economy with a competitive informal sector

Arbeitspapier

We consider a dual labor market with a frictional formal sector and a competitive informal sector. We show that the size of the informal sector is generally too large compared to the optimal allocation of the workers. It follows that our results give a rationale to informality-reducing policies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 6935

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Informal Economy; Underground Economy ; Mobility, Unemployment, Vacancies, and Immigrant Workers: General ; Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
• Subject: search and matching models ; informality ; efficiency ; Dualer Arbeitsmarkt ; Matching ; Informeller Sektor ; Allokationseffizienz ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Charlot, Olivier ; Malherbet, Franck ; Ulus, Mustafa
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/67306
• Last update: 10.03.2025, 11:42 AM CET