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Title:
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Informal Unemployment and Education
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Author:
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Kolm, Ann-Sofie; Larsen, Birthe |
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Abstract:
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This paper develops a four sector equilibrium search and matching
model with informal sector employment opportunities and educational
choice. We show that underground activities reduce educational at-
tainments if informal employment opportunities mainly are available
to low educated workers. More zealous enforcement policy will in this
case improve educational incentives as it reduces the attractiveness of
remaining a low educated worker. Characterizing the optimal enforce-
ment policies, we nd that relatively more audits should be targeted
towards the sector employing low educated workers, elsewise a too low
stock of educated workers is materialized. |
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URI:
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http://hdl.handle.net/10398/8328
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Date:
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2011-08-05 |
This work is licensed under a Creative Commons License.
