Optimal Policy with Informal Sector and Endogenous Savings

Borradores de Economia
Número: 
833
Publicado: 
Clasificación JEL: 
D91, J32, J64, J65
Palabras clave: 
Social Security Payment, Severance Payment, Informal Sector, Hidden Search Effort

Lo más reciente

Leonardo Fabio Morales, Leonardo Bonilla-Mejía, Didier Hermida-Giraldo, Francisco Javier Lasso-Valderrama, José Pulido
Leonardo Fabio Morales, Juan Chaparro-Cardona, Eleonora Dávalos, Nataly Corredor-Martinez

This paper analyzes the effect of social security and lump sum layoff payment in an economy with an informal sector and savings, where the search effort is unobserved. I characterize the optimal consumption/search/non-participant strategy assuming that wo