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Government Effectiveness and Regional Variation in Informal Employment

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  • Jonasson, Erik

    ()
    (Department of Economics, Lund University)

Abstract

This paper analyses the role of government effectiveness in the determination of informal employment. A theoretical model is developed, in which local governance and worker skill level are assumed to influence the decision of the worker whether to seek employment in the formal or informal sector. The model is assessed empirically using data from Brazil, where almost half of the urban labour force is employed informally. The empirical analysis supports the predictions of the model and suggests that informal employment is lower in regions with better governance and higher average education.

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File URL: http://project.nek.lu.se/publications/workpap/Papers/WP10_13.pdf
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Bibliographic Info

Paper provided by Lund University, Department of Economics in its series Working Papers with number 2010:13.

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Length: 18 pages
Date of creation: 26 Oct 2010
Date of revision: 31 Mar 2011
Publication status: Forthcoming as Jonasson, Erik, 'Government Effectiveness and Regional Variation in Informal Employment' in Journal of Development Studies.
Handle: RePEc:hhs:lunewp:2010_013

Contact details of provider:
Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en
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Keywords: informal employment; government effectiveness; Latin America; Brazil;

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References

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  1. Johannes P. J├╝tting & Jante Parlevliet & Theodora Xenogiani, 2008. "Informal Employment Re-loaded," OECD Development Centre Working Papers 266, OECD Publishing.
  2. Amuedo-Dorantes, Catalina, 2004. "Determinants and Poverty Implications of Informal Sector Work in Chile," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 347-68, January.
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Cited by:
  1. Hazans, Mihails, 2011. "Informal workers across Europe : evidence from 30 European countries," Policy Research Working Paper Series 5912, The World Bank.
  2. Basu, Arnab K. & Chau, Nancy & Siddique, Zahra, 2011. "Tax Evasion, Minimum Wage Non-Compliance and Informality," IZA Discussion Papers 6228, Institute for the Study of Labor (IZA).

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