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Refinements of methods for life cycle impact assessment (LCIA) are directed at removing unjustified simplifications and quantifying and reducing uncertainties in results. The amount of uncertainty reduction that is actually achieved through LCIA method refinement depends on the structure of the life cycle inventory model. We investigate the general structure of inventory models using an economic input/output (I/O) life cycle assessment model of the U.S. economy. In particular, we study the results of applying a streamlining algorithm to the I/O LCA model. The streamlining algorithm retains only those "branches" of the process tree that are jointly required to account for a specified fraction of the total impacts upstream of each point in the tree. We examine the implications of these "tree pruning" results for site‐informed LCIA. Percentiles are presented for U.S. commodities and several important pollutants, for the share of total upstream emissions contributed by the set of processes in each supply tier, that is, each set of processes that directly supply inputs to another set of processes. Capturing at least 90% of the total direct plus upstream emissions for criteria air pollutants and toxic releases for at least 75% of the commodities in the U.S. economy requires full modeling of direct emissions plus the first five supply tiers. The requirements for capturing a high percentage (e.g., > 80%) of total emissions vary widely across products or commodities. To capture more than 60% of total emissions for more than half of all commodities requires models with more than 4,000 process instances. To well characterize the total impacts of products, life cycle impact assessment methods must characterize foreground process impacts in a site‐informed way and mean impacts of far‐removed processes in an unbiased way.

In developing countries, informality is mainly concentrated on younger and older workers. In this paper, we propose a dual labor market theory that highlights how frictions and taxation in the formal sector as well as educational choices interact to shape the informality rate over the life-cycle. We develop a life-cycle model with search frictions, skill heterogeneities, and endogenous educational choices. We carry out a numerical analysis and show that our model reproduces remarkably well the life-cycle patterns of informality, non-employment and formal employment in Argentina. We analyze several public policies and show that an educational grant reduces both informality and non-employment and may be fully financed by the extra tax revenues generated by the increase in formal employment and wages. Lowering taxes may achieve similar results but is detrimental for the government budget, in the case of Argentina, despite increasing the base on which they are levied.

In developing countries, informality is mainly concentrated on younger and older workers. In this paper, we propose a dual labor market theory that highlights how frictions and taxation in the formal sector as well as educational choices interact to shape the informality rate over the life-cycle. We develop a life-cycle model with search frictions, skill heterogeneities, and endogenous educational choices. We carry out a numerical analysis and show that our model reproduces remarkably well the life-cycle patterns of informality, non-employment and formal employment in Argentina. We analyze several public policies and show that an educational grant reduces both informality and non-employment and may be fully financed by the extra tax revenues generated by the increase in formal employment and wages. Lowering taxes may achieve similar results but is detrimental for the government budget, in the case of Argentina, despite increasing the base on which they are levied.

In developing countries, informality is mainly concentrated on younger and older workers. In this paper, we propose a dual labor market theory that highlights how frictions and taxation in the formal sector as well as educational choices interact to shape the informality rate over the life-cycle. We develop a life-cycle model with search frictions, skill heterogeneities, and endogenous educational choices. We carry out a numerical analysis and show that our model reproduces remarkably well the life-cycle patterns of informality, non-employment and formal employment in Argentina. We analyze several public policies and show that an educational grant reduces both informality and non-employment and may be fully financed by the extra tax revenues generated by the increase in formal employment and wages. Lowering taxes may achieve similar results but is detrimental for the government budget, in the case of Argentina, despite increasing the base on which they are levied.

In developing countries, informality is mainly concentrated on younger and older workers. In this paper, we propose a dual labor market theory that highlights how frictions and taxation in the formal sector as well as educational choices interact to shape the informality rate over the life-cycle. We develop a life-cycle model with search frictions, skill heterogeneities, and endogenous educational choices. We carry out a numerical analysis and show that our model reproduces remarkably well the life-cycle patterns of informality, non-employment and formal employment in Argentina. We analyze several public policies and show that an educational grant reduces both informality and non-employment and may be fully financed by the extra tax revenues generated by the increase in formal employment and wages. Lowering taxes may achieve similar results but is detrimental for the government budget, in the case of Argentina, despite increasing the base on which they are levied.