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Unregistered Micro-Performers of Business Activity: The “Who” and “Why” in North Macedonia

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  • Marjan Petreski

    (University American College Skopje, North Macedonia)

  • Blagica Petreski

    (Finance Think – Economic Research & Policy Institute, Skopje, North Macedonia)

Abstract

The purpose of this paper is to understand who the unregistered micro-performers of business activity (MPBA) in North Macedonia are and why they decided to stay informal. We rely on a specifically designed Survey on Unregistered Micro-Enterprises collected from 151 unregistered MPBAs in May 2022. Results reveal that most common forms of unregistered MPBAs include: street sellers, individual farmers, handicraftsmen, providers of personal beauty services, painters, plasterers, bakers, lessons instructors, motor vehicle mechanics and housekeepers and cleaners. Costs of becoming a registered company, particularly taxes, social contributions, parafiscal charges and the cost for accounting, have been identified as an important impediment to registration. On the other hand, access to bigger customers, to more reliable sellers of inputs and to new markets have been identified as large benefits of formalization. The second motivation is the access to social protection and pension in the old age. Costs of staying informal have limited power in motivating registration.

Suggested Citation

  • Marjan Petreski & Blagica Petreski, 2022. "Unregistered Micro-Performers of Business Activity: The “Who” and “Why” in North Macedonia," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 24(2), pages 45-77, December.
    • Handle: RePEc:iez:survey:ces-v24_2-2022_petreski-petreski
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    References listed on IDEAS

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    More about this item

    Keywords

    unregistered micro-performers of business activity; costs of formalization; benefits from formalization; costs of staying informal; North Macedonia;
    All these keywords.

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy

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