We provide an analysis of enforcement policies applicable to formal sector in dual labor markets. Using a framework with heterogeneous firms, endogenous determination of informal wage and politically dictated enforcement strategies, we show that firms which operate both in the formal and...

Emigration leads to finite changes in structure of production and sectors vanish because they cannot pay higher wages. Does emigration of one type of labor hurt the other non-emigrating type in this set up? We demonstrate various scenarios when real incomes of the emigrating and the...

We conduct two policy experiments in a general equilibrium framework with an informal sector. The first deals with a liberal trade policy and the second with a decline in the unionized wage rate. In both cases, informal workers gain if capital moves between the formal and the informal segments...

Recent papers, discussing the impact of economic reform in India, argue that the positive effect of reform is more significant in states, which are not ‘labor friendly’. Also labor market reforms seem to be a pre-condition for success of liberal policies as far as their impact on poverty is...

The recent growth experience in India highlights the role of skill-based service sector and productivity improvement rather than a significant rise in physical capital accumulation, which has only reached a new height very recently. In this context we study the possible impact of higher...

The recent growth experience in India highlights the role of skill-based service sector and productivity improvement rather than a significant rise in physical capital accumulation. In this context we study the possible impact of higher productivity of labor in the formal sector on the informal...

We provide an analysis of enforcement policies applicable to formal sector in dual labor markets. We use a framework with heterogeneous firms, endogenous determination of informal wage and politically dictated enforcement strategies. Firms which operate both in the formal and informal sectors do...

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...