quantitative theory to study the dynamic implications of informality on wage inequality, human capital accumulation, child labor … and long-run growth. Our model can generate transitory informality equilibria or informality-induced poverty traps. Its … calibration reveals that the case for the poverty-trap hypothesis is strong: although informality serves to protect low …

literature using search models to study labor market informality: should informal self-employment and informal employment as … equality between the two states, cautioning against aggregating them in a common "informality state." The parametric model …