Rethinking the informal labour from an evolutionary point of view
AbstractThe model presents the dynamics and the equilibrium of an overlapping generation economy when there is informal employment, a pension system and altruistic agents. The model inspires from stylised facts on developing and Euro-Mediteranean countries where family plays a central role in risk insurance. The rational is emphasised by lower costs compared to private and public insurance systems. Given an initial distribution of the informally employed individuals, the model captures the effects of social security decisions and anticipated bequests on the preference of the agents for formal or informal employment. The impact of fiscal policies on the distribution of employment to formal and informal categories is analysed through the political competition. We show that opportunist behaviour would amplify the relative size of the informal employment.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).
Volume (Year): 40 (2011)
Issue (Month): 5 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/620175
Evolutionary dynamics; Informal employment; Public social insurance; Bequests; Political competition;
Find related papers by JEL classification:
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ellen McGrattan & Richard Rogerson & Randall Wright, 1995.
"An equilibrium model of the business cycle with household production and fiscal policy,"
Staff Report, Federal Reserve Bank of Minneapolis
191, Federal Reserve Bank of Minneapolis.
- McGrattan, Ellen R & Rogerson, Richard & Wright, Randall, 1997. "An Equilibrium Model of the Business Cycle with Household Production and Fiscal Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 267-90, May.
- Packard, Truman G., 2007. "Do workers in Chile choose informal employment? A dynamic analysis of sector choice," Policy Research Working Paper Series 4232, The World Bank.
- Maloney, William F, 1999. "Does Informality Imply Segmentation in Urban Labor Markets? Evidence from Sectoral Transitions in Mexico," World Bank Economic Review, World Bank Group, World Bank Group, vol. 13(2), pages 275-302, May.
- Karras, Georgios, 1994. "Government Spending and Private Consumption: Some International Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 26(1), pages 9-22, February.
- Laurence J. Kotlikoff & Avia Spivak, 1979.
"The Family as an Incomplete Annuities Market,"
NBER Working Papers
0362, National Bureau of Economic Research, Inc.
- Kotlikoff, Laurence J & Spivak, Avia, 1981. "The Family as an Incomplete Annuities Market," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 89(2), pages 372-91, April.
- Laurence J. Kotlikoff & Avia Spivak, 1979. "The Family as an Incomplete Annuities Market," UCLA Economics Working Papers, UCLA Department of Economics 151, UCLA Department of Economics.
- Sebastian Galiani & Federico Weinschelbaum, 2007.
"Modeling Informality Formally: Households and Firms,"
CEDLAS, Working Papers, CEDLAS, Universidad Nacional de La Plata
0047, CEDLAS, Universidad Nacional de La Plata.
- Sebastian Galiani & Federico Weinschelbaum, 2012. "Modeling Informality Formally: Households And Firms," Economic Inquiry, Western Economic Association International, vol. 50(3), pages 821-838, 07.
- Maloney, William F., 2004.
Elsevier, vol. 32(7), pages 1159-1178, July.
- Tokman, Victor E., 1989. "Policies for a heterogeneous informal sector in Latin America," World Development, Elsevier, vol. 17(7), pages 1067-1076, July.
- Johannes P. Jütting & Jante Parlevliet & Theodora Xenogiani, 2008. "Informal Employment Re-loaded," OECD Development Centre Working Papers 266, OECD Publishing.
- Juan RamÃ³n de Laiglesia, 2008. "Living with Duality: Fiscal Policy and Informality in Latin America," OECD Development Centre Policy Insights, OECD Publishing 81, OECD Publishing.
- Matthew Jowett, 2003. "Do informal risk sharing networks crowd out public voluntary health insurance? Evidence from Vietnam," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 35(10), pages 1153-1161.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.