Ravi Kanbur, Arnab Basu, Nancy H Chau, 18 July 2011

The authors of CEPR DP8485 analyze two stylized views of formal and informal labor markets: 1) that the informal sector is competitive and 2) that contract enforcement in the informal sector is not possible. They argue these two "facts" are incompatible. In informal sectors, the lack of contract enforcement does in fact bestow market power on employers over workers, distorting competitiveness in these markets.

Rita Da Costa, Juan Ramón de Laiglesia, Ángel Melguizo, Emmanuelle Martinez, 12 February 2011

Informal employment remains pervasive in Latin America and the Caribbean. Many workers, not just the disadvantaged, are informal and contribute irregularly, if at all, to a pension plan. This column argues that governments should consider extending social pensions and stimulating individual saving.


CEPR Policy Research