Labor market reform and poverty – the role of informal sector
Recent 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.
|Date of creation:||Apr 2008|
|Date of revision:||2009|
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- Besley, Timothy J. & Burgess, Robin, 2002.
"Can Labour Regulation Hinder Economic Performance? Evidence from India,"
CEPR Discussion Papers
3260, C.E.P.R. Discussion Papers.
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NBER Working Papers
11614, National Bureau of Economic Research, Inc.
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- Kar, Saibal & Marjit, Sugata, 2009. "Urban informal sector and poverty," International Review of Economics & Finance, Elsevier, vol. 18(4), pages 631-642, October.
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