Article ID Journal Published Year Pages File Type
988432 Structural Change and Economic Dynamics 2010 10 Pages PDF
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.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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