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This chapter is concerned with the identification and estimation of models of labor supply. The focus is on the key issues that arise from unobserved heterogeneity, nonparticipation and dynamics. We examine the simple “static” labor supply model with proportional taxes and highlight the...
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of Burdett and Mortensen (1998) to allow for two sectors of employment. Firms are heterogeneous and decide endogenously … informality. In particular, we evaluate the impact of a tighter regulatory framework on employment in the formal and the informal …
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