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The impact of institutions and policy on informal economy in developing countries : an econometric exploration

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  • Rei, Diego
  • Bhattacharya, Manas
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    Abstract

    This paper shows empirical tests for the determinants of informal economy separately in terms of (i) income generation in the informal economy in proportion to the GDP and (ii) the proportion of employment in the informal economy to the total non-agricultural employment. Drawing on previous findings and their policy implications, the paper attempts to estimate statistically more encompassing and robust models to assess how a mix of policies and institutions impact informal economy.

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    File URL: http://www.ilo.org/public/libdoc/ilo/2008/108B09_94_engl.pdf
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    Bibliographic Info

    Paper provided by International Labour Organization in its series ILO Working Papers with number 413498.

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    Length: 49 pages
    Date of creation: 2008
    Date of revision:
    Publication status: Published in Working paper series, International Labour Office.
    Handle: RePEc:ilo:ilowps:413498

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    Keywords: informal economy; informal employment; income; government policy; institutional framework; measurement; econometric model; économie informelle; emploi informel; revenu; politique gouvernementale; cadre institutionnel; mesure; modèle économétrique; economía informal; empleo informal; ingreso; política gubernamental; organización institucional; medición; modelo econométrico;

    References

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    1. Michael J. Pisani & José A. Pag�n, 2004. "Self-employment in the era of the new economic model in Latin America: a case study from Nicaragua," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 16(4), pages 335-350, July.
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    12. Devarajan, Shantayanan & Ghanem, Hafez & Thierfelder, Karen, 1997. "Economic Reform and Labor Unions: A General-Equilibrium Analysis Applied to Bangladesh and Indonesia," World Bank Economic Review, World Bank Group, vol. 11(1), pages 145-70, January.
    13. Diwan, Ishac & Walton, Michael, 1997. "How International Exchange, Technology, and Institutions Affect Workers: An Introduction," World Bank Economic Review, World Bank Group, vol. 11(1), pages 1-15, January.
    14. Friedrich Schneider & Dominik Enste, 2000. "Shadow Economies Around the World," IMF Working Papers 00/26, International Monetary Fund.
    15. Banerji, Arup & Ghanem, Hafez, 1997. "Does the Type of Political Regime Matter for Trade and Labor Market Policies?," World Bank Economic Review, World Bank Group, vol. 11(1), pages 171-94, January.
    16. Panayiota Lyssiotou & Panos Pashardes & Thanasis Stengos, 2004. "Estimates of the black economy based on consumer demand approaches," Economic Journal, Royal Economic Society, vol. 114(497), pages 622-640, 07.
    17. Currie, Janet & Harrison, Ann E, 1997. "Sharing the Costs: The Impact of Trade Reform on Capital and Labor in Morocco," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S44-71, July.
    18. Friedman, Eric & Johnson, Simon & Kaufmann, Daniel & Zoido-Lobaton, Pablo, 2000. "Dodging the grabbing hand: the determinants of unofficial activity in 69 countries," Journal of Public Economics, Elsevier, vol. 76(3), pages 459-493, June.
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    Cited by:
    1. Paul Levine & Emanuela Lotti & Nicoletta Batini & Young-Bae Kim, 2010. "Informal Labour and Credit Markets: A Survey," IMF Working Papers 10/42, International Monetary Fund.

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