Utility-based estimation of labour supply functions in the regular and irregular sectors

Article Abstract:

An empirical model on labor supply in the regular and irregular sectors based on a derived standard tax evasion model is presented. The study shows that a rise in marginal tax rate results in increased hours in the irregular sector for persons working in both regular and irregular sectors. Gross-wage elasticities are observed to be positive and significant while gross-wage elasticities are negative but also significant. Results of the study also suggest that an increase of the probability of audit or penalty decreases hours in the irregular market. Furthermore, perfect substitutability between regular and irregular hours is not supported by the findings.

Economic aspects, Labor supply, Labor force, Tax evasion

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International trade and labour-market outcomes: results, questions, and policy options

Article Abstract:

A modeling of international trade's effects on wage inequality in the labor market shows that while international trade does produce a positive effect on wage inequality, the difference effected is such a small amount that is hardly noticeable. This can be conjectured to result from the numerous factors still unaccounted for by the single-cone Heckscher-Ohlin model, or that international trade does not really produce such a significant effect to increase the wage inequality gap.

Economics, Research and Development in the Social Sciences and Humanities, Models, International trade, Distribution (Economics), Wages, Wages and salaries

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