IDEAS home Printed from https://ideas.repec.org/a/vrs/econom/v10y2022i2p95-108n1.html
   My bibliography  Save this article

New approach to estimating macroeconomic determinants of informal employment

Author

Listed:
  • Vidović Nikola

    (Faculty of Economics, University of Belgrade and Metrics d. o. o., Banja Luka)

  • Ritan Vladana

    (, Metrics d. o. o., Banja Luka)

Abstract

Informal employment is a less favourable type of employment whose levels policy makers usually want to decrease and move these workers in the formal part of the labour market. It is more commonly found in LDCs and in developing economies, than in developed ones. This paper uses a cross-section multiple regression analysis to check the effects of multiple macroeconomic variables on the size of the informal labour market. The sample is made out of economies for which ILO has published data about the share of employment outside the formal sector, excluding the economies that receive aid from IDA, using 2017, 2018 and 2019 data from the International Labour Organization and other international organizations. Results show that macroeconomic variables do not have significant explanatory power, except for unemployment rate, exports and GDP growth rate.

Suggested Citation

  • Vidović Nikola & Ritan Vladana, 2022. "New approach to estimating macroeconomic determinants of informal employment," Economics, Sciendo, vol. 10(2), pages 95-108, December.
    • Handle: RePEc:vrs:econom:v:10:y:2022:i:2:p:95-108:n:1
    DOI: 10.2478/eoik-2022-0012
    as

    Download full text from publisher

    File URL: https://doi.org/10.2478/eoik-2022-0012
    Download Restriction: no
    File URL: https://libkey.io/10.2478/eoik-2022-0012?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. World Bank, 2019. "Global Economic Prospects, January 2019," World Bank Publications - Books, The World Bank Group, number 31066, December.
    2. Sabine Bernabe, 2002. "Informal Employment in Countries in Transition: A conceptual framework," CASE Papers 056, Centre for Analysis of Social Exclusion, LSE.
    3. Axel Dreher & Friedrich Schneider, 2010. "Corruption and the shadow economy: an empirical analysis," Public Choice, Springer, vol. 144(1), pages 215-238, July.
    4. World Bank, 2019. "Global Economic Prospects, June 2019," World Bank Publications - Books, The World Bank Group, number 31655, December.
    5. Sabine Bernabe, 2002. "Informal Employment in Countries in Transition: A conceptual framework," CASE Papers case56, Centre for Analysis of Social Exclusion, LSE.
    6. Colin C. WILLIAMS & Mark A. LANSKY, 2013. "Informal employment in developed and developing economies: Perspectives and policy responses," International Labour Review, International Labour Organization, vol. 152(3-4), pages 355-380, December.
    7. Johannes Jütting & Jante Parlevliet & Theodora Xenogiani, 2008. "Informal Employment Re-loaded," OECD Development Centre Working Papers 266, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nguyen, Duy Loi & Nguyen, Binh Giang & Tran, Thi Ha & Vo, Thi Minh Le & Nguyen, Dinh Ngan, 2014. "Employment, Earnings and Social Protection for Female Workers in Vietnam’s Informal Sector," MPRA Paper 61989, University Library of Munich, Germany.
    2. Fiedler, Salomon & Gern, Klaus-Jürgen & Jannsen, Nils & Wolters, Maik H., 2019. "Growth prospects, the natural interest rate, and monetary policy," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-34.
    3. Huang, Xiaodan & Chang, Shiyan & Zheng, Dingqian & Zhang, Xiliang, 2020. "The role of BECCS in deep decarbonization of China's economy: A computable general equilibrium analysis," Energy Economics, Elsevier, vol. 92(C).
    4. Uchida, Yuki & Ono, Tetsuo, 2021. "Political economy of taxation, debt ceilings, and growth," European Journal of Political Economy, Elsevier, vol. 68(C).
    5. Friedrich SCHNEIDER, 2016. "Estimating the Size of the Shadow Economy: Methods, Problems and Open Questions," Turkish Economic Review, KSP Journals, vol. 3(2), pages 256-280, June.
    6. Paraskevi Koufopoulou & Colin C. Williams & Athanassios Vozikis & Kyriakos Souliotis, 2019. "Shadow Economy: Definitions, terms & theoretical considerations," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 9(5), pages 1-3.
    7. repec:thr:techub:10019:y:2021:i:1:p:401-411 is not listed on IDEAS
    8. Lahlou, Kamal & Doghmi, Hicham & Schneider, Friedrich, 2020. "The Size and Development of the Shadow Economy in Morocco," Document de travail 2020-3, Bank Al-Maghrib, Département de la Recherche.
    9. Selçuk Akçay & Emre Karabulutoğlu, 2021. "Do remittances moderate financial development–informality nexus in North Africa?," African Development Review, African Development Bank, vol. 33(1), pages 166-179, March.
    10. World Bank Group, 2019. "Central African Republic Economic Update, November 2019," World Bank Publications - Reports 32793, The World Bank Group.
    11. François Gardes & Christophe Starzec, 2009. "Polish Households' Behavior in the Regular and Informal Economies," Revue économique, Presses de Sciences-Po, vol. 60(5), pages 1181-1210.
    12. Anita Staneva & G Arabsheibani, 2014. "Is there an informal employment wage premium? Evidence from Tajikistan," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-24, December.
    13. Pierre Nguimkeu & Cedric Okou, 2021. "Leveraging digital technologies to boost productivity in the informal sector in Sub‐Saharan Africa," Review of Policy Research, Policy Studies Organization, vol. 38(6), pages 707-731, November.
    14. -, 2020. "Perspectivas de la agricultura y del desarrollo rural en las Américas: una mirada hacia América Latina y el Caribe 2019-2020," Coediciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 45111 edited by Cepal, July.
    15. Bolortuya Purev & Weida He, 2021. "Coal industrial supply chain network: Mongolian capabilities across the Asian market," Technium Social Sciences Journal, Technium Science, vol. 19(1), pages 401-411, May.
    16. Nikoloski Dimitar & Pechijareski Ljupcho, 2017. "The Unemployed Workers’ Perceptions of Stress and Employment Prospects in Macedonia: The Role of Alternative Adjustment Mechanisms," South East European Journal of Economics and Business, Sciendo, vol. 12(1), pages 68-79, April.
    17. Anna Zudina, 2013. "Do informal workers make an underclass? An analysis of subjective social status," HSE Working papers WP BRP 24/SOC/2013, National Research University Higher School of Economics.
    18. Hilaire Nkengfack & Hervé Kaffo Fotio & Armand Totouom, 2021. "How Does the Shadow Economy Affect Environmental Quality in Sub-Saharan Africa? Evidence from Heterogeneous Panel Estimations," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(4), pages 1635-1651, December.
    19. Williams Colin C, 2019. "Explaining and tackling the informal economy: an evaluation of competing perspectives," Open Economics, De Gruyter, vol. 2(1), pages 63-75, January.
    20. , 2019. "The “Normal” Normal: Supply and Demand Drivers over the Next 10 Years : Agricultural Symposium 2019," Economic Review, Federal Reserve Bank of Kansas City, issue Special I, pages 27-49, July.
    21. Gentile, Elisabetta & Li, Gen & Mariasingham, Mahinthan Joseph, 2020. "Assessing the impact of the US-PRC trade dispute using a multiregional CGE model," Conference papers 333144, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

    More about this item

    Keywords

    informal labour; informal work; shadow economy; labour; macroeconomics; developing economies; globalisation;
    All these keywords.

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J00 - Labor and Demographic Economics - - General - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:econom:v:10:y:2022:i:2:p:95-108:n:1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.