In this paper, we develop a model that captures stylized facts of informal labor markets. We show how justice interference on informal contracts leads to penalties in the equilibrium wage of informal workers. We also state that, in a repeated game situation, an equilibrium where the wage gaps...

This paper attempts to evaluate municipality secession in terms of the median voter response on the executive local elections. Our results imply that incumbents in the new municipalities have a higher chance of reelection which suggests that the median voter approved the secession process....