Tax policies, informality, and real wage rigidities

Salazar Silva, Marlon

doi:https://doi.org/10.48713/10336_45565

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Tax policies, informality, and real wage rigidities

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dc.creator	Salazar Silva, Marlon	spa
dc.date.accessioned	2025-06-05T20:20:34Z
dc.date.available	2025-06-05T20:20:34Z
dc.date.created	2021-12-01	spa
dc.date.issued	2021-12-01	spa
dc.description	Developing countries have a vast informal sector generally associated with low levels of productivity. The persistence of informality could be a response to rigidities in the labor market, associated with a combination of high non-wages cost and high minimum wages. This paper proposes a theoretical framework to understand the tax policies’ role that discourages informality, such as lower payroll taxes in the formal sector or increases enforcement expenditure in an economy with real wage rigidities. I develop a search and matching model with a shirking mechanism with formal and informal workers. The simulations results suggest that the magnitud effect of tax polcies depends on real wage rigidities. In relative terms, when the economy has high real wage rigidities, the reduction of payroll taxes has a greater effect reducing the informality. In contrast, when the economy has low real wage rigidities, the enforcement expenditure has a significant effect to reduce the informality. Also, the results show the existence of tax polcies combition that reduce the informal labor in an effective way.	spa
dc.format.extent	27 pp	spa
dc.format.mimetype	application/pdf	spa
dc.identifier.doi	https://doi.org/10.48713/10336_45565
dc.identifier.uri	https://repository.urosario.edu.co/handle/10336/45565
dc.language.iso	eng	spa
dc.publisher	Universidad del Rosario	spa
dc.publisher	Alianza EFI	spa
dc.publisher.department	Facultad de Economía	spa
dc.rights	Attribution-NonCommercial-NoDerivatives 4.0 International	spa
dc.rights.accesRights	info:eu-repo/semantics/openAccess	spa
dc.rights.acceso	Abierto (Texto Completo)	spa
dc.rights.uri	http://creativecommons.org/licenses/by-nc-sa/4.0/	spa
dc.source.instname	instname:Universidad del Rosario	spa
dc.source.reponame	reponame:Repositorio Institucional EdocUR	spa
dc.subject.keyword	Informality	eng
dc.subject.keyword	Tax policies	eng
dc.subject.keyword	Enforcement expenditure	eng
dc.subject.keyword	Fiscal policies	eng
dc.subject.keyword	Search and matching	eng
dc.subject.keyword	Efficiency wage	eng
dc.subject.keyword	Shirking mechanism	eng
dc.title	Tax policies, informality, and real wage rigidities	spa
dc.type	workingPaper	spa
dc.type.hasVersion	info:eu-repo/semantics/publishedVersion	spa
dc.type.spa	Documento de trabajo	spa
local.department.report	Facultad de Economía