This paper develops a standard matching model to address the problem of the hidden sector, as it is characterised in Italy, i.e. framed in a rather advanced economic and institutional setting, but also linked to the socio-economic regional dualism. The main novel features of the model are that...

This paper provides an explanation for five stylized facts concerning growth and structural change in the developed economies: (i) the rising share of service employment; (ii) the increase in the female employment rate; (iii) the deceleration of this increase while approaching the male employment...

A general equilibrium model is proposed which assumes that firms hire both official and unregistered workers as imperfect substitutes, that entrepreneurs differ in their ability to increase the efficiency of official labour, and that this ability is due to heterogeneous original ability and to...

Many empirical studies show the paradoxical fact that service output in proportion to industrial output does not tend to decline, in spite of rising service prices. Baumol's "cost disease" model well explains rising service prices, but it simply assumes that the output proportion remains...