Informality, Corruption, and Inequality
AbstractThe paper looks at the determinants of the size of the informal sector. We argue that corruption and informality complement each other and are jointly determined by various market and non-market variables. Our theoretical model as well empirical exercises focus on wealth and income inequality as a key determinant. High degree of inequality leads to bigger informal sector. We offer several plausible channels through inequality can impact the size of the informal sector.
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Bibliographic InfoPaper provided by University of Bath, Department of Economics in its series Department of Economics Working Papers with number 22127.
Date of creation: Dec 2010
Date of revision:
product; informal sector; corruption; differentiation; credit market; inequality;
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