Trade and Informality in the Presence of Labor Market Frictions and Regulations Rafael Dix-Carneiro, Pinelopi Koujianou Goldberg, Costas Meghir, Gabriel Ulyssea Abstract We build an equilibrium model of a small open economy with labor market frictions and imperfectly enforced regulations. Heterogeneous firms sort into the formal or informal sector. We estimate the model using data […]