2006–2010

Job Search and Mobility in Developing Countries. Theory and Policy Implications

Särtryck nr 2008:11

Författare: Yves ZenouÅr: 2008 Publikation: Journal of Development Economics Årgång (nr): 86 (2) Sidor: 336–355


A labor market model is developed in which the formal sector is characterized by search frictions whereas the informal sector is competitive. We show that there exists a unique steady-state equilibrium in this dual economy. We then consider different policies financed by a tax on firms' profits. We find that reducing the unemployment benefit or the firms' entry cost in the formal sector induces higher job creation and formal employment, reduces the size of the informal sector but has an ambiguous effect on wages. We also find that an employment/wage subsidy policy and a hiring subsidy policy have different implications. In particular, the former increases the size of the informal sector while the latter decreases it.


Referens:
Zenou, Yves (2008), "Job Search and Mobility in Developing Countries. Theory and Policy Implications". Journal of Development Economics 86(2), 336–355.

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Niklas Elert

Forskningsområden: Entreprenörskap och ekonomisk dynamik.

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