TY  - JOUR
AU  - Meghir,Costas
AU  - Narita,Renata
AU  - Robin,Jean-Marc
TI  - Wages and Informality in Developing Countries
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18347
PY  - 2012
Y2  - August 2012
UR  - http://www.nber.org/papers/w18347
L1  - http://www.nber.org/papers/w18347.pdf
N1  - Author contact info:
Costas Meghir
Department of Economics
Yale University
37 Hillhouse Avenue
New Haven, CT 06511
Tel: 203/432-3558
E-Mail: c.meghir@yale.edu

Renata Narita
World Bank
1818 H Street,
NW Washington, DC 20433 
E-Mail: renata.narita@gmail.com

Jean-Marc Robin
Sciences Po
Department of Economics
(Office room, J402)
28 rue des Saints Pères
75007 Paris France
E-Mail: jeanmarc.robin@sciences-po.fr
AB  - It is often argued that informal labor markets in developing countries promote growth by reducing the impact of regulation. On the other hand informality may reduce the amount of social protection offered to workers. We extend the wage-posting framework of Burdett and Mortensen (1998) to allow heterogeneous firms to decide whether to locate in the formal or the informal sector, as well as set wages. Workers engage in both off the job and on the job search. We estimate the model using Brazilian micro data and evaluate the labor market and welfare effects of policies towards informality.
ER  -