Munich Personal RePEc Archive

Informal Wage, Informal Price and Extortion under Migration and Tariff Reform

Mandal, Biswajit and Chaudhuri, Saswati (2011): Informal Wage, Informal Price and Extortion under Migration and Tariff Reform. Published in: Modern Economy , Vol. 1, No. 2 (February 2011): pp. 38-43.

This is the latest version of this item.

[img]
Preview
PDF
MPRA_paper_34240.pdf

Download (93Kb) | Preview

Abstract

In this paper we propose a theoretical model where formal and informal sectors co-exist in tandem. Trade union segregates some labor from being formal. Capital is not allowed to freely move between formal and informal sectors. Using this sort of framework it has been shown that immigration of unskilled workers reduces the return to informal labor and makes the informal good relatively cheaper. A tariff slash also impinges on similar kind of results. In both the cases informal capitalists gain. Moreover, what is more striking is that both migration and tariff reform are equally bad for the economy as a whole since these policies enhance the ‘unproductive’ element or labor in the society which is really costly as these laborers could have been used to produce some more consumable commodities.

Available Versions of this Item

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.