Measuring the Informal Economy in the Caucasus and Central Asia
AbstractThis study estimates the size of the informal economy, and the relative contribution of each underlying factor, for the Caucasus and Central Asia countries in 2008. Using a Multiple Indicator-Multiple Cause model, we find that a burdensome tax system, rigid labor market, low institutional quality, and excessive regulation in financial and products markets are determinant factors in explaining the size of the informal economy, which ranges from 26 percent of GDP in Kyrgyz Republic to around 35 percent of GDP in Armenia. Furthermore, the results show that higher levels of informality increase the levels of self employment and the percentage of currency held outside the banking system.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 13/137.
Date of creation: 31 May 2013
Date of revision:
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Postal: International Monetary Fund, Washington, DC USA
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-24 (All new papers)
- NEP-CWA-2013-09-24 (Central & Western Asia)
- NEP-DEV-2013-09-24 (Development)
- NEP-IUE-2013-09-24 (Informal & Underground Economics)
- NEP-TRA-2013-09-24 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Roberta Gatti Diego F. Angel-Urdinola & Joana Silva & Andras Bodor, 2011. "Striving for Better Jobs : The Challenge of Informality in the Middle East and North Africa Region," World Bank Other Operational Studies 10857, The World Bank.
- Guillermo Javier Vuletin, 2008. "Measuring the Informal Economy in Latin America and the Caribbean," IMF Working Papers 08/102, International Monetary Fund.
- Feldmann, Horst, 2009. "The unemployment effects of labor regulation around the world," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 76-90, March.
- Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
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