The theoretical model delves into the relationship between labor market institutions and unemployment by proving two propositions: (1) allowing informal activity bolsters job creation, and (2) if the institutional environment is initially, sufficiently, weak, then mitigating it will lower...

In the present paper, we analyze the effect of unemployment benefits on unemployment. We do this by elaborating on a model developed by Miyagiwa (1988) in several respects. First, we establish Walras' law and give an explicit consideration to the government budget balance. We also incorporate...