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Tackling Business and Labour Informality in Chile

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  • Dante Contreras
  • Luiz de Mello
  • Esteban Puentes

Abstract

Informality often arises from disincentives associated with high taxes and a restrictive regulatory framework in both labour and product markets. About 20% of the Chilean population aged 15 years and above and working at least 20 hours per week did not have a formal labour contract in 2006. At the same time, nearly 11% of the potential value added tax base is estimated to have been undeclared in 2005. While Chile’s tax system is not particularly burdensome to business formality, there is scope for making product-market regulations less onerous to firms and the labour code more flexible, especially with regards to indefinite contracts and the allocation of working time. Low human capital remains an important obstacle to reducing labour informality. To the extent that informal businesses also hire informally, there is some room for designing policies to tackle business informality in conjunction with those aimed at boosting formal labour contracting. Chile is strengthening its social safety net through the introduction of unemployment insurance and by reforming existing health insurance and pension systems. An important policy question is whether the incentives for formality arising from more comprehensive social protection will be strong enough to compensate for the additional costs these contributory programmes entail. This paper relates to the 2007 Economic Survey of Chile (www.oecd.org/eco/surveys/chile). S'attaquer à l'activité informelle au Chili L’activité informelle résulte souvent de contre-incitations liées au niveau élevé des taux d’imposition et à un cadre réglementaire restrictif, tant sur le marché du travail que sur les marchés de produits. Environ 20 % des Chiliens âgés de 15 ans et plus et travaillant au moins 20 heures par semaine n’avaient pas de contrat de travail en 2003. En même temps, environ 40-50 % des entreprises auraient des activités informelles et l’on estime que près de 11 % des activités soumises à la taxe sur la valeur ajoutée n’ont pas été déclarées en 2005. Même si le système fiscal du Chili ne pèse pas excessivement sur le secteur formel, il est possible de rendre la réglementation des marchés de produits moins coûteuse pour les entreprises et d’assouplir le code du travail, surtout en ce qui concerne l’affectation du temps de travail. Dans la mesure où les entreprises du secteur informel emploient aussi une main-d’oeuvre non déclarée, il est possible d’élaborer des politiques en vue de s’attaquer à l’activité informelle, associées aux mesures visant à stimuler l’offre de contrats de travail officiels. Le Chili renforce actuellement son filet de sécurité sociale en mettant en place une assurance chômage et une réforme des systèmes existants d’assurance maladie et de pensions. Une question importante qui se pose est celle de savoir si une protection sociale plus étendue créera des incitations à l’activité formelle assez puissantes pour compenser les coûts additionnels que ces programmes contributifs entraînent. Ce document se rapporte à l’Étude économique du Chili 2007 (www.oecd.org/eco/etudes/chili).

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File URL: http://dx.doi.org/10.1787/242111325372
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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 607.

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Date of creation: 14 Apr 2008
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Handle: RePEc:oec:ecoaaa:607-en

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Related research

Keywords: human capital; product market regulation; informality; social protection; protection sociale; informalité; réglementation des marchés de produits; capital humain;

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