We build a general equilibrium model in which both illegal immigration and the size of the informal sector are endogenously determined. In this framework, we show that indirect policy measures such as tax reduction and detection of informal activities can be used as substitutes for border...

Rent seeking within the vast informal segment of the developing world is a relatively underdexplored topic in the interface of labor market policies and public economics. Moreover, how rent seeking and corruption within the informal segment is affected by economic reforms targeted for the formal...

This paper examines a much overlooked link between credit markets and formalization: since access to bank credit typically requires compliance with tax and employment legislation, firms are more likely to incur such formalization costs once bank credit is more widely available at lower cost; if...

Economic growth in Russia in the first decade of this century almost doubled the country's GDP but was accompanied by substantial reallocation of labor to the unregulated sector while formal employment was on gradual decline. The paper overviews evolution of the Russian labour market during the...

This paper studies the effects of remittances on informal employment in the migrants' countries of origin, looking both at the remittance-receiving and non-migrant households. Using data from the Social Exclusion Survey, conducted in six transition economies in 2009, I find that receiving...

In recent years there has been much policy discussion of the impact of unemployment benefits and other factors on unemployment duration in developed and transition countries. This paper presents first evidence on the determinants of unemployment duration in Ukraine. Using individual-level data...

I develop a dynamic model of forward-looking entrepreneurs, who decide whether to operate in the formal economy or informal economy and choose how much to invest in their businesses, taking government policy as given. The government has access to two policy tools: taxes on formal business...

Interjurisdictional flows of imperfectly-mobile migrants, investment, and other productive resources result in the costly dynamic adjustment of resource stocks. This paper investigates the comparative dynamics of adjustment to changes in local fiscal policy with two imperfectly mobile productive...

In this paper, we consider fiscal competition between jurisdictions. Capital taxes are used to finance a public input and two public goods, one which benefits mobile skilled workers and one which benefits immobile unskilled workers. We derive the jurisdictions' reaction functions for different...