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Titel
Labor market search, informality and schooling investments / Matteo Bobba (Toulouse School of Economics and IZA), Luca Flabbi (University of North Carolina at Chapel Hill and IZA), Santiago Levy (Inter-American Development Bank and IZA) ; IZA Institute of Labor Economics
VerfasserBobba, Matteo In der Gemeinsamen Normdatei der DNB nachschlagen ; Flabbi, Luca In der Gemeinsamen Normdatei der DNB nachschlagen ; Levy, Santiago In der Gemeinsamen Normdatei der DNB nachschlagen
KörperschaftForschungsinstitut zur Zukunft der Arbeit In der Gemeinsamen Normdatei der DNB nachschlagen
ErschienenBonn, Germany : IZA Institute of Labor Economics, November 2017
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Elektronische Ressource
Umfang1 Online-Ressource (54, X Seiten) : Diagramme
SerieDiscussion paper ; no. 11170
URNurn:nbn:de:hbz:5:2-144316 Persistent Identifier (URN)
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Labor market search, informality and schooling investments [0.78 mb]
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Zusammenfassung

We develop a search and matching model where firms and workers are allowed to form matches (jobs) that can be formal or informal. Workers optimally choose the level of schooling acquired before entering the labor market and whether searching for a job as unemployed or as self-employed. Firms optimally decide the formality status of the job and bargain with workers over wages. The resulting equilibrium size of the informal sector is an endogenous function of labor market parameters and institutions. We focus on an increasingly important institution: a "dual" social protection system whereby contributory benefits in the formal sector coexist with non-contributory benefits in the informal sector. We estimate preferences for the system - together with all the other structural parameters of the labor market - using labor force survey data from Mexico and the time-staggered entry across municipalities of a non-contributory social program. Policy experiments show that informality may be reduced by either increasing or decreasing the payroll tax rate in the formal sector. They also show that a universal social security benefit system would decrease informality, incentivize schooling, and increase productivity at a relative fiscal cost that is similar to the one generated by the current system.