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...

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...

The paper attempts to find out the relationship between informal wage and innovative efforts of firms in the formal sector in countries such as India, where informal sector captures lion's share of total workforce. A firm employs both formal and informal workers to produce a good. In equilibrium...

In many developing economies rate of unemployment is increasing with skill accumulation and thereby leading to underemployment. Our paper offers to look at skill formation as a demand side problem not as a traditional supply side problem and also how skill formation or education affects...

This paper provides a simple demonstration of an empirical observation pointed out by the existing literature that the presence of informality in the production sector of an economy moderates the impact of economic shocks affecting it. We show that in the presence of informality, adverse demand...

We examine the impact of economic deregulation on employer evasion of union-mandated "formal" wage-contracts in an import-competing industry. We show that, if the state maintains industrial employment despite import liberalisation, through cheaper credit to firms, then employer evasion will...

Studies on formal-informal interactions in the labor markets of developing countries claim that economic reform increases the level of informal activity. Although the extent of such claims differs across countries, it is generally believed that reform is likely to depress informal wage by...

We consider an economy with two groups of individuals, rich and poor. A central authority can either directly redistribute income to the poor, or allow for some degree of informality in economic activities by not enforcing property rights. The optimal degree of informality depends upon the...

We express a doubt on the conventional wisdom namely, of a positive relationship between wage and productivity, of a formal sector firm in a developing economy where the firm can either go for subcontracting to the informal sector to minimize wage cost along with apprehension of extra-legal cost...