The structure of the public sector in developing economies is likely to affect private sector wage and employment decisions and hence, have an influence on the aggregate labour market. In this paper, excess public employment is analyzed under the efficiency wage framework to find out how wage...

This paper studies the impact of product and labor market regulations on informality and unemployment in a general framework where formal and informal firms are subject to the same externalities, differing only with respect to some parameter values. Both formal and informal firms have monopoly...