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Wages and informality in developing countries. (2013). Robin, Jean-Marc ; Meghir, Costas ; Narita, Renata.
In: CeMMAP working papers.
RePEc:ifs:cemmap:08/13.

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  1. Great opportunities or poor alternatives: self-employment, unemployment and paid employment over the business cycle. (2014). Visschers, Ludo ; Kredler, Matthias ; Millan, Ana.
    In: 2014 Meeting Papers.
    RePEc:red:sed014:597.

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References

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  22. For each point on the grids, one can calculate a corresponding wage wjk using equations (15) and (16), and replacing integrals by quadrature approximations. The appropriate quadrature for Chebychev nodes is the Clenshaw-Curtis (CC) quadrature, whose weights ωk can be easily calculated using Fast Fourier Transform (FFT) (see Waldvogel, 2006). For example, we have (1+λ10s)w1k = (r +λ10)W1k −λ10 (W2 +UI) −λ11 W1 −W1 N ∑ n=0 ωn111(W1n>W1k)F1(W1n) −λ12 W2 −W2 N ∑ n=0 ωn111(W2n>W1k)F2(W2n), where 1() is the indicator function. A similar expression can be obtained to determine wage nodes for the informal sector, w2k. Then we search for θθθ minimising Q1(θθθ|λλλ) = ∑ j=1,2 M ∑ k=0 G∗ j(wjk)−Gj(Wjk) , where Gj(Wjk) is calculated using equations (6) and (7), and replacing integrals by CC-quadrature approximations, and G∗ j is an estimate of wage distribution functions,.
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