Growth and labour markets in developing countries

Mathan Satchi and Jonathan Temple

CEDI Discussion Paper Series from Centre for Economic Development and Institutions(CEDI), Brunel University

Abstract: In middle-income countries, the informal sector often accounts for a substantial fraction of urban employment. We develop a general equilibrium model with matching frictions in the urban labour market, the possibility of self-employment in the informal sector, and scope for rural-urban migration. We investigate the effects of different types of growth on wages and the informal sector, and the extent to which labour market institutions can influence aggregate productivity. We quantify these effects by calibrating the model to data for Mexico, a country with a sizeable informal sector and significant labour market rigidities.

Pages: 51 pages
Date: 2006-08
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Citations: View citations in EconPapers (18)

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Related works:
Working Paper: Growth and labour markets in developing countries (2006)
Working Paper: Growth and Labour Markets in Developing Countries (2006)
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