We show theoretically that when larger firms pay higher wages and are more likely to becaught defaulting on labour taxes, then large high-wage firms will be in the formal sector andsmall low-wage firms will be in the informal sector...

We analyze optimal taxation in an economy with monopsonistic labor markets. Theindividuals, whose only decisions are whether to work, or not, have heterogeneousproductivities and opportunity costs of work. Given its preferences for redistribution, thegovernment, which does not observe the...

This paper applies recent advances in the study of labor market dynamics to a representativedeveloping country with a large unregulated of “informal” sector. It confirms the relevance ofthe recent mainstream models and debates surrounding gross worker flows to the developingcountry context,...

We find that women sorting into lower wage firms explains nearly half of the gender wage gap in South Africa, using matched employer-employee panel data covering the universe of formal sector workers. Sorting varies considerably over the life cycle: the firm-wage gender gap is negligible for the...

This paper analyzes the horizontal spillover effects of Germany's first sectoral minimum wage. Using a difference-in-differences estimation, I examine the impact of the public announcement and introduction of the minimum wage on sub-minimum wage workers in related jobs outside the minimum wage...

The economy of Kinshasa, the capital of the Democratic Republic of Congo (DRC), is characterized by a significant presence of the informal sector. This sector plays a crucial role in job creation and the livelihoods of the population, but also presents challenges in terms of regulation, social...

This paper evaluates the wage effects of a tax credit policy on new hirings in Southern Italy. We use high-quality administrative data and propose a latent class inverse probability weighting method as a strategy to account for workers' unobserved heterogeneity. We find an unexpected negative...

The main aim of this work is to explain the Chilean gender wage gap using a dynamic monopsony model to estimate the labor supply elasticities at the firm level. Our results suggest that the elasticities of labor supply to firms are small, which implies that firms have labor market power. We also...

Australia, since the early 1980s, has been a leading advocate and practitioner of the neo-liberal economic model, also known as the Anglo-Saxon (or Anglo-American) model due to its geographical origins in the UK and the US, and its subsequent ascendancy in Australia, New Zealand and Canada,...

Informal employment is a reality for roughly two-thirds of economically active youth in urban Egypt, and it has been argued to be correlated with poverty, poor working conditions, and few opportunities for advancement. This essay analyzes whether informal employment rewards job qualification...