nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2017‒11‒26
three papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Unemployment insurance, job mobility and formalization: an analysis of the Brazilian case By Danilo P. Souza
  2. Inequality, Good Governance and Endemic Corruption By Epstein, Gil S.; Gang, Ira N.
  3. Towards a New Paradigm of IR Strategy By Somnath Ghosh

  1. By: Danilo P. Souza
    Abstract: In order to assess the recent rise in the fiscal expenses due to unemployment insurance (UI) in Brazil, we build a simple matching model that takes into account the growing formalization rate, job mobility and other institutional characteristics of the country’s labor market. Our results indicate that around 77% of the positive variation in the UI expenses is due to an increase in the formalization rate, while 22% is due to a rise in the job mobility between 2000-2014.
    Keywords: labor market; job mobility; informality; unemployment insurance
    JEL: J08 J65
    Date: 2017–10–30
  2. By: Epstein, Gil S.; Gang, Ira N.
    Abstract: Can a society suffering contests between rich and poor achieve good governance in the face of endemic corruption? We examine a stylized poor state with weak institutions in which a “culture of evasion” damages state authority. Many evade tax payments, limiting the state’s economic development capability. In the face of extensive corruption, it is challenging for the state to establish and implement policies reflecting good governance; for example, a government that is accountable and transparent, efficient and effective, and follows the rule of law. The rich and poor possess different views on what is the appropriate level of enforcing proper payments of taxes due. The government needs to design an effective tax administration policy that minimizes corruption and is sensitive to the present and future needs of society. To do this it must understand what drives such widespread corruption.
    Keywords: corruption,tax administration,governance,rent-seeking
    JEL: O12 O15 D82 G38
    Date: 2017
  3. By: Somnath Ghosh (Indian Institute of Management Kashipur)
    Abstract: In the realm of managing industrial relations (IR), organizations are handicapped in two ways: the government?s labour regulations and compliance regime, and their own inability to extricate themselves from half-baked theories and poor management practices. Research findings indicate the growth of the informal sector at the expense of the formal sector, but with low productivity, low wages and virtually no job security. And in the formal sector, data indicates rising conflict often laced with brutal violence. While organizations in the formal sector wait for labour reforms towards greater labour market flexibility that would lead to greater labour mobility and higher productivity and employment in the formal manufacturing sector, they could undertake a paradigm shift in their IR strategy. Such a paradigm shift in IR strategy would not just obviate many of the ills besetting the industrial relations scenario, but provide a competitive advantage. Based on a year-long work in a steel tube manufacturing company in western India, this paper distils the architecture of a paradigm shift in IR strategy for organizational turnaround.
    Keywords: IR Strategy, conflict, high potential candidates, Ops-HR linkage
    JEL: J50
    Date: 2017–10

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