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An evolutionary game theory approach to the dynamics of the labour market: A formal and informal perspective

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  • Araujo, Ricardo Azevedo
  • de Souza, Nathalia Almeida

Abstract

A stylized fact of the labour market in developing countries is that it is highly segmented in informality. One of the main factors that induce workers and firms into informality is an excessive regulatory system that makes formal economy little attractive. This study aims to analyze the dynamics of workers and firms' entrance and withdrawal of the formal and informal economy, assessing the impact of taxes by using an evolutionary game theory approach in which economic agents decide for one these markets according to the expected pay-off. Moreover, the optimal relation between regulatory and enforcement action by the government is evaluated.

Suggested Citation

  • Araujo, Ricardo Azevedo & de Souza, Nathalia Almeida, 2010. "An evolutionary game theory approach to the dynamics of the labour market: A formal and informal perspective," Structural Change and Economic Dynamics, Elsevier, vol. 21(2), pages 101-110, May.
  • Handle: RePEc:eee:streco:v:21:y:2010:i:2:p:101-110
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:matcom:v:142:y:2017:i:c:p:82-97 is not listed on IDEAS
    2. Araujo, Ricardo Azevedo & Loureiro, Paulo Roberto & Souza, Nathalia Almeida, 2011. "An Empirical Evaluation of an Evolutionary Game Theory Model of the Labor Market," MPRA Paper 30408, University Library of Munich, Germany.
    3. repec:ebl:ecbull:eb-17-00472 is not listed on IDEAS
    4. Ricardo Azevedo Araujo & Helmar Nunes Moreira, 2014. "Lyapunov stability in an evolutionary game theory model of the labour market," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 15(1), pages 41-53.
    5. repec:cys:ecocyb:v:50:y:2017:i:1:p:281-302 is not listed on IDEAS

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