Informality in developing economies: Regulation and fiscal policies
| Autor: | Olivier Charlot, Cristina Terra, Franck Malherbet |
|---|---|
| Přispěvatelé: | Université de Franche-Comté (UFC), Université Bourgogne Franche-Comté [COMUE] (UBFC), Centre de Recherche en Économie et Statistique (CREST), Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] (ENSAI)-École polytechnique (X)-École Nationale de la Statistique et de l'Administration Économique (ENSAE Paris)-Centre National de la Recherche Scientifique (CNRS), Centre de Recherche en Economie Appliquée à la Mondialisation (CREAM), Université de Rouen Normandie (UNIROUEN), Normandie Université (NU)-Normandie Université (NU)-Institut de Recherche Interdisciplinaire Homme et Société (IRIHS), Normandie Université (NU)-Normandie Université (NU)-Université de Rouen Normandie (UNIROUEN), Normandie Université (NU), Théorie économique, modélisation et applications (THEMA), Université de Cergy Pontoise (UCP), Université Paris-Seine-Université Paris-Seine-Centre National de la Recherche Scientifique (CNRS), Institut de Recherche Interdisciplinaire Homme et Société (IRIHS) |
| Rok vydání: | 2015 |
| Předmět: |
Economics and Econometrics
Stylized fact Labour economics Control and Optimization Product market Applied Mathematics media_common.quotation_subject 05 social sciences 1. No poverty Wage Policy analysis [SHS]Humanities and Social Sciences Product (business) Collective bargaining 0502 economics and business 8. Economic growth Unemployment Economics 050207 economics Monopoly ComputingMilieux_MISCELLANEOUS 050205 econometrics media_common |
| Zdroj: | Journal of Economic Dynamics and Control Journal of Economic Dynamics and Control, Elsevier, 2015, 51, pp.1-27. ⟨10.1016/j.jedc.2014.09.031⟩ |
| ISSN: | 0165-1889 |
| DOI: | 10.1016/j.jedc.2014.09.031 |
| Popis: | This paper proposes a unified theoretical framework where formal and informal firms coexist and face the same type of product and labor market imperfections: they have monopoly power in the goods market, they are subject to matching frictions in the labor market, and wages are determined by bargaining between large firms and their workers, through either individual or collective bargaining. Our model matches the main stylized facts on informality for developing countries and appears to be a good candidate for policy analysis. In this framework, we study the impact on informality, wages and unemployment of policies that may be used to reduce informality. We consider changes in product market regulation (PMR) and in two types of fiscal policies, labor taxes and formality enforcement. We find that lessening PMR decreases informality and unemployment simultaneously, indicating that there is not necessarily a tradeoff between informality and unemployment. The tradeoff appears when fiscal policies are used, though. Moreover, the impacts of PMR on unemployment and on wages are larger under collective than individual bargaining. With respect to wage inequality, lessening PMR reduces it, while lower taxes tend to increase the formal sector wage premium. |
| Databáze: | OpenAIRE |
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