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Shadow Employment and Labor Productivity Dynamics

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Author Info
Maurizio Bovi

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Abstract

This paper offers theoretical and empirical insights on the anecdotal 'buffer hypothesis', i.e. the view that the shadow employment functions as an improper tool for increasing the labor market flexibility. Official data for Italy support the premise. Although the contemporaneous correlation between Hodrick-Prescott-detrended shadow labor and output is positive and significant, as time passes their association looses momentum. The opposite is found for the regular employees. Because of their lower productivity level, the cyclical response of the hidden workers affects the short-term profile of the overall labor productivity. It adds new hints on the still puzzling 1990s productivity dynamics. Copyright 2007 The Author. Journal compilation CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd. 2007.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9914.2007.00384.x
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Publisher Info
Article provided by CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd in its journal LABOUR.

Volume (Year): 21 (2007)
Issue (Month): 4-5 (December)
Pages: 735-761
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Handle: RePEc:bla:labour:v:21:y:2007:i:4-5:p:735-761

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1121-7081

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  1. Bruno Chiarini & Elisabetta Marzano, 2008. "Interaction between Underground Employment and Unions in selected Italian industries," Working Papers 6_2008, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy. [Downloadable!]
  2. Maurizio Bovi & Peter Claeys, 2008. "Treasury V Dodgers. A Tale of Fiscal Consolidation and Tax Evasion," ISAE Working Papers 93 Classification-JEL E62, ISAE - Institute for Studies and Economic Analyses - (Rome, ITALY). [Downloadable!]
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This page was last updated on 2009-11-22.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.