Labor market reform and poverty – the role of informal sector
AbstractRecent papers, discussing the impact of economic reform in India, argue that the positive effect of reform is more significant in states, which are not ‘labor friendly’. Also labor market reforms seem to be a pre-condition for success of liberal policies as far as their impact on poverty is concerned. We argue that the exact mechanism behind such a link is yet to be clarified. We try to provide such a mechanism in terms of a general equilibrium model involving formal and informal workers. Our framework is capable of providing such a link and shows that there are occasions when such link is violated.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 23999.
Date of creation: Apr 2008
Date of revision: 2009
Informal labor; capital mobility; labor market reform;
Find related papers by JEL classification:
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
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