Informality and Aggregate Productivity: The Case of Mexico
Informality and Aggregate Productivity: The Case of Mexico
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Volume/Issue:
Volume 2019
Issue 257
Publication date: November 2019
ISBN: 9781513519920
$20.00
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Topics covered in this book
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Labor , Economics- Macroeconomics , Public Finance , WP , informal firm , size distribution , profit function , firm's idiosyncratic productivity , incumbent firm , firm value function , unproductive firm , firms in Mexico , idiosyncratic productivity , Informal employment , Productivity , Wages , Public expenditure review , aggregate productivity impact , IMF working papers , policy reform , front matter page , Self-employment
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.
