Albrecht, James W. (contributor); Navarro, Lucas (contributor) - 2006
. Labor market policies, which by definition apply only to the formal sector, can have important spillover effects on the … market policies in an economy with an informal sector. Our model extends Mortensen and Pissarides (1994) by allowing for ex … ante worker heterogeneity with respect to formal-sector productivity. We analyze the effects of labor market policy on …