January 14, 2013
Activities /
Posted by NCID

Pamplona. Janurary 14th, 2013

Joaquín Naval is a Ph.D. Candidate at the Universitat Autónoma de Barcelona. Naval delivered a seminar about the effects of the informal economy and long-term growth in developing countries. By creating a two-period overlapping generations model with children and working-age adults, he established a theoretical relationship between education, child labor, and the informal sector. Naval further highlighted the importance of using means-tested education subsidies as a way to end the poverty trap. He concluded that the long term benefit of informality protects low-skilled workers from cases of extreme poverty, but the short term impact prevents income convergence between developed and developing nations.