Purpose – The purpose of this paper is to examine the existence of skill differentiation between formal and informal labor markets. Design/methodology/approach – First, a theoretical model is developed under the assumption that concealment of production is increasingly costly for informal...

Purpose – The aim of this paper is to perform an evaluation of the Brazilian informal labor market, following the lines suggested by Araujo and Souza. The paper focuses on the Brazilian labor market by using data from the National Household Sampling Survey – PNAD/IBGE, from 1995 to 2008....