Labour and Trade

A huge challenge for research and policy efforts to accelerate economic development is that firms in poor countries grow surprisingly slowly, making job creation in the “Global South” difficult to achieve. Why can't some firms access desirable markets?

A rapidly growing number of US cities have decided to set local minimum wages. Are minimum wages set at city level a good idea? This study examines the main trade-offs emerging from the local variation in minimum wage policies.

A determinant of aggregate productivity differences, both across countries and within countries over time, is how well resources such as capital and labour are allocated across firms. The importance of such resource misallocation for aggregate productivity is often inferred from the dispersion in average revenue products (revenues over inputs) in firm-level data. This paper proposes a methodology to correct estimates of misallocation for measurement error in revenue and inputs.

The informal sector accounts for a large part of the economy in most developing countries, comprising between 20-80 percent of the labour force and an equally large share of firms. Yet, we still know little about the overall labour market and welfare effects of trade liberalisation in settings characterised by extensive labour market regulation, weak enforcement, and informality, which characterize many developing economies. This research fills this gap by developing a structural equilibrium model of trade and informality.