Participation in the labour market provides a crucial source of income for most people. The presence of informal labour markets, and tax evasion, is a salient feature of most developing economies that has implications for the individuals, public revenues and economies more generally. In this sense, understanding the functioning and effect of labour market institutions and policy interventions, including individuals' incentives to participate in the informal labour market, or to evade taxes, has important implications in terms of economic performance and individuals’ well-being.
Research in this area is closely related to other research areas such as 'Tax and social security systems', and 'Education'. Examples of the research questions we consider are: the effect of the enforcement of labour regulation on employment, informality and inequality in Brazil; the returns to education and its determinants in developing countries such as Indonesia and Brazil; the interactions between the pension system, and reforms to it, and individuals’ participation in the informal labour markets in Chile, Colombia and Mexico; the impact of programmes aimed at alleviating extreme poverty on labour market outcomes in countries such as Chile and Colombia.