Informality and Aggregate Productivity: The Case of Mexico
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Summary:
We assess the aggregate productivity impact of distortions arising from labor regulations in Mexico and how they interact with informality. Using employment surveys and a firm-level economic census, we document a number of novel features about informal firms in Mexico. We then construct and estimate a model of heterogeneous firms and endogenous informality to study the micro and macro impacts from various policy reforms. Some reforms may have large impacts on informal employment but small impacts on aggregate productivity.
Series:
Working Paper No. 2019/257
Subject:
Expenditure Informal employment Labor Production Productivity Public expenditure review Self-employment Wages
English
Publication Date:
November 27, 2019
ISBN/ISSN:
9781513519920/1018-5941
Stock No:
WPIEA2019257
Pages:
43
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