We examine the impact of economic deregulation on employer evasion of union-mandated "formal" wage-contracts in an import-competing industry. We show that, if the state maintains industrial employment despite import liberalisation, through cheaper credit to firms, then employer evasion will...

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...