FIGHTING INFORMALITY IN SEGMENTED LABOR MARKETS: A general equilibrium analysis applied to Uruguay

As in other Latin American countries, labor informality in Uruguay mainly affects less educated workers, who are also more vulnerable to poverty. We analyze the impact of some policies against informality in Uruguay, applying a general equilibrium model with a segmented labor market specification. W...

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Autores principales:	Estrades,Carmen, Terra,María Inés
Lenguaje:	English
Publicado:	Pontificia Universidad Católica de Chile. Instituto de Economía. 2011
Materias:	Informality labor market general equilibrium model policies poverty
Acceso en línea:	http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000100001
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spelling	oai:scielo:S0719-043320110001000012012-05-29FIGHTING INFORMALITY IN SEGMENTED LABOR MARKETS: A general equilibrium analysis applied to UruguayEstrades,CarmenTerra,María Inés Informality labor market general equilibrium model policies poverty As in other Latin American countries, labor informality in Uruguay mainly affects less educated workers, who are also more vulnerable to poverty. We analyze the impact of some policies against informality in Uruguay, applying a general equilibrium model with a segmented labor market specification. We simulate two sets of policies: payroll tax cuts and increased enforcement in the informal sector. Both sets of policies are effective in reducing informality, but the effect on poverty is not straightforward. Poverty falls as informality is reduced; however, as enforcement policies increase hiring costs for informal firms, wages of low-skilled workers decline and poverty increases.info:eu-repo/semantics/openAccessPontificia Universidad Católica de Chile. Instituto de Economía.Latin american journal of economics v.48 n.1 20112011-05-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000100001en10.4067/S0719-04332011000100001
institution	Scielo Chile
collection	Scielo Chile
language	English
topic	Informality labor market general equilibrium model policies poverty
spellingShingle	Informality labor market general equilibrium model policies poverty Estrades,Carmen Terra,María Inés FIGHTING INFORMALITY IN SEGMENTED LABOR MARKETS: A general equilibrium analysis applied to Uruguay
description	As in other Latin American countries, labor informality in Uruguay mainly affects less educated workers, who are also more vulnerable to poverty. We analyze the impact of some policies against informality in Uruguay, applying a general equilibrium model with a segmented labor market specification. We simulate two sets of policies: payroll tax cuts and increased enforcement in the informal sector. Both sets of policies are effective in reducing informality, but the effect on poverty is not straightforward. Poverty falls as informality is reduced; however, as enforcement policies increase hiring costs for informal firms, wages of low-skilled workers decline and poverty increases.
author	Estrades,Carmen Terra,María Inés
author_facet	Estrades,Carmen Terra,María Inés
author_sort	Estrades,Carmen
title	FIGHTING INFORMALITY IN SEGMENTED LABOR MARKETS: A general equilibrium analysis applied to Uruguay
title_short	FIGHTING INFORMALITY IN SEGMENTED LABOR MARKETS: A general equilibrium analysis applied to Uruguay
title_full	FIGHTING INFORMALITY IN SEGMENTED LABOR MARKETS: A general equilibrium analysis applied to Uruguay
title_fullStr	FIGHTING INFORMALITY IN SEGMENTED LABOR MARKETS: A general equilibrium analysis applied to Uruguay
title_full_unstemmed	FIGHTING INFORMALITY IN SEGMENTED LABOR MARKETS: A general equilibrium analysis applied to Uruguay
title_sort	fighting informality in segmented labor markets: a general equilibrium analysis applied to uruguay
publisher	Pontificia Universidad Católica de Chile. Instituto de Economía.
publishDate	2011
url	http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000100001
work_keys_str_mv	AT estradescarmen fightinginformalityinsegmentedlabormarketsageneralequilibriumanalysisappliedtouruguay AT terramariaines fightinginformalityinsegmentedlabormarketsageneralequilibriumanalysisappliedtouruguay
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FIGHTING INFORMALITY IN SEGMENTED LABOR MARKETS: A general equilibrium analysis applied to Uruguay

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