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The informal economy in Tunisia: measurement and linkage with the formal economy

Author

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  • Mehdi Abid
  • Ousama Ben Salha

Abstract

This paper has two main goals. The first is to estimate the size of the informal economy between 1980 and 2009 in Tunisia. The second objective is to check for the causal relationship from the formal economy to the informal economy. When calculating the size of the informal economy, we were based on a recent environmental approach proposed by Karanfil and Ozkaya (2007). Our results, based on the estimation of the Kalman filter, reveal that the informal GDP has a U-shaped curve over time. Furthermore, the informal GDP is found to range between 14% and 29% of the formal GDP during the same period. Cointegration and Granger causality tests show that there is a causal relationship running from the formal GDP to the informal GDP. Moreover, the former seems to negatively affect the latter.

Suggested Citation

  • Mehdi Abid & Ousama Ben Salha, 2013. "The informal economy in Tunisia: measurement and linkage with the formal economy," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 6(2), pages 194-209.
    • Handle: RePEc:ids:ijecbr:v:6:y:2013:i:2:p:194-209
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    Citations

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    Cited by:

    1. Habib Sekrafi & Mehdi Abid & Soufiene Assidi, 2021. "The impact of terrorism on formal and informal economy in African countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 1163-1180, January.
    2. Nadia Mbazia, 2023. "Do Payment Technology Innovations Affect Currency Demand in Tunisia?," International Journal of Economics and Financial Issues, Econjournals, vol. 13(1), pages 164-171, January.
    3. Mehdi Abid, 2016. "Energy Consumption-Informal Economic Growth Analysis: What Policy Options Do We Have?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 7(1), pages 207-218, March.
    4. Loudi Njoya & Ibrahim Ngouhouo & Moussa Njoupouognigni & Schneider Friederich & Zenabou Tourere, 2024. "Can we understand the simultaneous evolution between economic and informality growth in Africa? A preliminary explanation," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(1), pages 398-414, January.
    5. Hilaire Nkengfack & Hervé Kaffo Fotio & Armand Totouom, 2021. "How Does the Shadow Economy Affect Environmental Quality in Sub-Saharan Africa? Evidence from Heterogeneous Panel Estimations," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(4), pages 1635-1651, December.
    6. Onwuka , Ifeanyi & Ayeni, Emmanuel, 2023. "Financial Development and Shadow Economy in Africa: Evidence from Panel Quantile Regression," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 48(2), pages 123-141, June.

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