The Disctinction between Formal and Informal on the Labor Market
The Disctinction between Formal and Informal on the Labor Market

Summary/Abstract: Any economy, regardless of its level of development, is characterized by the formal-informal duality of the labor market, but informality is more pronounced in emerging economies. The measures applied in developing economies during the transition to a market economy have left behind immeasurable social costs and deep structural imbalances, especially in the labor market. Among the structural imbalances in emerging economies we can mention the dual nature of the economy, represented by the two sectors of the economy, namely formal and informal, lack of flexibility of labor and low wages, which can be considered a barrier for employment. In this paper we aim to make a characterization of the dual labor market and to present what are the main differences between the two types of labor markets: formal and informal. In this regard, we will consider the following aspects related to: regulation, revenues / incomes, duration of contracts, flexibility, quantification, segmentation and entering to the market.

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