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Towards a Better Understanding of the Informal Economy

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  • Dan Andrews
  • Aida Caldera Sánchez
  • Åsa Johansson

Abstract

It is important to understand the nature and drivers of informality, as its social and economic consequences are wide-ranging. This paper critically reviews the current state of cross-country research on informality and discusses how existing data sources can be more effectively employed and extended to shed light on the link between public policies and informality. A number of interesting findings emerge. The informal economy is multi-faceted and a wide range of definitions and measures are required to capture its diverse activities. However, most existing – and widely used – cross-country estimates of informality suffer from large measurement problems, which reduce the reliability of existing empirical evidence on the extent and drivers of informality. Accordingly, future research on informality should be closely linked to obtaining better data, particularly at the household and firm levels. Vers une meilleure compréhension de l'économie informelle Il est important de comprendre la nature et les déterminants de l'économie informelle, tant ses conséquences sociales et économiques sont vastes. Ce document examine d’une façon critique l'état actuel de la recherche sur l'économie informelle, et examine la façon d'utiliser plus efficacement les données existantes et d'étendre les bases de données pour mieux établir un lien entre les politiques publiques et l'informalité. Quelques conclusions intéressantes se dégagent de cette étude. L'économie informelle présente de multiples facettes et un large éventail de définitions et de mesures sont nécessaires pour saisir ses diverses formes. Cependant, la plupart des indicateurs disponibles - et largement utilisés - souffrent de problèmes de mesurabilité, qui réduisent la fiabilité des données empiriques existantes et les résultats sur l'ampleur et les déterminants de l'informalité. Ainsi, les futures recherches sur l'informalité devraient recueillir de meilleures données, en particulier sur les ménages et les entreprises.

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 873.

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Date of creation: 30 May 2011
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Handle: RePEc:oec:ecoaaa:873-en

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Keywords: tax evasion; property rights; informal economy; measurement issues; regulations; économie informelle; mesurabilité; droits de propriété; régulations; évasion fiscale;

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Cited by:
  1. Thai, Mai Thi Thanh & Turkina, Ekaterina, 2014. "Macro-level determinants of formal entrepreneurship versus informal entrepreneurship," Journal of Business Venturing, Elsevier, vol. 29(4), pages 490-510.

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