Journal Article

On the Aggregate Implications of Removing Barriers to Formality

Abstract: This article examines the aggregate implications of several policies aimed at removing barriers to formality. To this end, we build a dynamic equilibrium model in which heterogeneous agents choose to work for a wage or operate a technology in the formal or informal sector, based on the costs and benefits associated with these occupational choices.

JEL Classification: E26; H20; J30; L26; O17;

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Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Review

Publication Date: 2020-05

Volume: 102

Issue: 2

Pages: 203-220