IDEAS home Printed from https://ideas.repec.org/a/iza/izawol/journl2022n59.html
   My bibliography  Save this article

Informal employment in emerging and transition economies

Author

Listed:
  • Fabián Slonimczyk

    (NRU Higher School of Economics, Russian Federation, and IZA, Germany)

Abstract

In developing and transition economies as much as half the labor force works in the informal sector (or “shadow economy”). Informal firms congest infrastructure and other public services but do not contribute the taxes needed to finance them. Informal workers are unprotected against such negative shocks as ill-health, but for certain groups there can be scarce opportunities to enter the formal sector meaning informal employment is the only feasible option. Reducing informality requires better enforcement, more reasonable regulation, and economic growth.

Suggested Citation

  • Fabián Slonimczyk, 2022. "Informal employment in emerging and transition economies," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-59, March.
    • Handle: RePEc:iza:izawol:journl:2022:n:59
    as

    Download full text from publisher

    File URL: https://wol.iza.org/uploads/articles/59/pdfs/informal-employment-in-emerging-and-transition-economies.pdf
    Download Restriction: no
    File URL: https://wol.iza.org/articles/informal-employment-in-emerging-and-transition-economies
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Schneider, Friedrich, 2005. "Shadow economies around the world: what do we really know?," European Journal of Political Economy, Elsevier, vol. 21(3), pages 598-642, September.
    2. Slonimczyk, Fabian & Gimpelson, Vladimir, 2013. "Informality and Mobility: Evidence from Russian Panel Data," IZA Discussion Papers 7703, Institute of Labor Economics (IZA).
    3. Slonimczyk, Fabian, 2011. "The effect of taxation on informal employment: evidence from the Russian flat tax reform," MPRA Paper 35404, University Library of Munich, Germany.
    4. Pratap, Sangeeta & Quintin, Erwan, 2006. "Are labor markets segmented in developing countries? A semiparametric approach," European Economic Review, Elsevier, vol. 50(7), pages 1817-1841, October.
    5. Loayza, Norman V., 1996. "The economics of the informal sector: a simple model and some empirical evidence from Latin America," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 45(1), pages 129-162, December.
    6. Guillermo E. Perry & William F. Maloney & Omar S. Arias & Pablo Fajnzylber & Andrew D. Mason & Jaime Saavedra-Chanduvi, 2007. "Informality : Exit and Exclusion," World Bank Publications - Books, The World Bank Group, number 6730.
    7. Maloney, William F, 1999. "Does Informality Imply Segmentation in Urban Labor Markets? Evidence from Sectoral Transitions in Mexico," The World Bank Economic Review, World Bank, vol. 13(2), pages 275-302, May.
    8. Lehmann, Hartmut & Pignatti, Norberto, 2007. "Informal Employment Relationships and Labor Market Segmentation in Transition Economies: Evidence from Ukraine," IZA Discussion Papers 3269, Institute of Labor Economics (IZA).
    9. Bosch, Mariano & Maloney, William F., 2010. "Comparative analysis of labor market dynamics using Markov processes: An application to informality," Labour Economics, Elsevier, vol. 17(4), pages 621-631, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ligita Gasparėnienė & Rita Remeikienė & Colin C. Williams, 2022. "Unemployment and the Informal Economy," SpringerBriefs in Economics, Springer, number 978-3-030-96687-4, October.
    2. Bucevska Vesna, 2019. "Determinants of Income Inequality in EU Candidate Countries: A Panel Analysis," Economic Themes, Sciendo, vol. 57(4), pages 397-413, December.
    3. Bargain, Olivier & Etienne, Audrey & Melly, Blaise, 2021. "Informal pay gaps in good and bad times: Evidence from Russia," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 693-714.
    4. Almeida, Eloiza R.F. & Araújo, Veneziano & Gonçalves, Solange L., 2022. "Urban wage premium for women: evidence across the wage distribution," World Development, Elsevier, vol. 159(C).
    5. Juan Pablo Martinez Guzman & Travis St. Clair, 2021. "Pension reform and self‐employment in Latin America," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 2230-2254, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fabián Slonimczyk & Vladimir Gimpelson, 2015. "Informality and mobility," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 23(2), pages 299-341, April.
    2. Slonimczyk, Fabian & Gimpelson, Vladimir, 2013. "Informality and Mobility: Evidence from Russian Panel Data," IZA Discussion Papers 7703, Institute of Labor Economics (IZA).
    3. Hartmut Lehmann, 2015. "Informal Employment in Transition Countries: Empirical Evidence and Research Challenges," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 57(1), pages 1-30, March.
    4. Paula Herrera-Id�rraga & Enrique L�pez-Bazo & Elisabet Motell�n, 2015. "Double Penalty in Returns to Education: Informality and Educational Mismatch in the Colombian Labour Market," Journal of Development Studies, Taylor & Francis Journals, vol. 51(12), pages 1683-1701, December.
    5. Falco, Paolo & Maloney, William F. & Rijkers, Bob & Sarrias, Mauricio, 2015. "Heterogeneity in subjective wellbeing: An application to occupational allocation in Africa," Journal of Economic Behavior & Organization, Elsevier, vol. 111(C), pages 137-153.
    6. Bargain, Olivier & Etienne, Audrey & Melly, Blaise, 2021. "Informal pay gaps in good and bad times: Evidence from Russia," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 693-714.
    7. Tansel, Aysit & Kan, Elif Oznur, 2011. "Labor mobility across the formal/informal divide in Turkey: evidence from individual level data," MPRA Paper 35672, University Library of Munich, Germany.
    8. Daniel Haanwinckel & Rodrigo R Soares, 2021. "Workforce Composition, Productivity, and Labour Regulations in a Compensating Differentials Theory of Informality [Search with Multi-worker Firms]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(6), pages 2970-3010.
    9. Aysit Tansel & Halil Ibrahim Keskin & Zeynel Abidin Ozdemir, 2015. "Is There an Informal Employment Wage Penalty in Egypt?," Working Papers 976, Economic Research Forum, revised Dec 2015.
    10. Aysit Tansel & Elif Öznur Acar, 2017. "Labor mobility across the formal/informal divide in Turkey: Evidence from individual-level data," Journal of Economic Studies, Emerald Group Publishing, vol. 44(4), pages 617-635, September.
    11. Erik Jonasson, 2011. "Informal Employment and the Role of Regional Governance," Review of Development Economics, Wiley Blackwell, vol. 15(3), pages 429-441, August.
    12. Hazans, Mihails, 2011. "Informal Workers across Europe: Evidence from 30 Countries," IZA Discussion Papers 5871, Institute of Labor Economics (IZA).
    13. Aysit Tansel & Halil Ibrahim Keskin & Zeynel Abidin Ozdemir, 2015. "Is There An Infırmal Employment Wage Penalty in Egypt?," ERC Working Papers 1508, ERC - Economic Research Center, Middle East Technical University, revised Sep 2015.
    14. Fiess, Norbert M. & Fugazza, Marco & Maloney, William F., 2010. "Informal self-employment and macroeconomic fluctuations," Journal of Development Economics, Elsevier, vol. 91(2), pages 211-226, March.
    15. Mireille Razafindrakoto & François Roubaud & Jean-Michel Wachsberger, 2012. "Nature et fonction du secteur informel : une analyse de la satisfaction dans l'emploi au Vietnam," Working Papers DT/2012/10, DIAL (Développement, Institutions et Mondialisation).
    16. Loayza, Norman V. & Rigolini, Jamele, 2011. "Informal Employment: Safety Net or Growth Engine?," World Development, Elsevier, vol. 39(9), pages 1503-1515, September.
    17. Calderón, Valentina & Marinescu, Ioana, 2011. "The Impact of Colombia's Pension and Health Insurance Systems on Informality," IDB Publications (Working Papers) 3831, Inter-American Development Bank.
    18. Costas Meghir & Renata Narita & Jean-Marc Robin, 2015. "Wages and Informality in Developing Countries," SciencePo Working papers hal-03587627, HAL.
    19. Xavier Jara & David Rodríguez, 2019. "Financial disincentives to formal work: Evidence from Ecuador and Colombia," WIDER Working Paper Series wp-2019-14, World Institute for Development Economic Research (UNU-WIDER).
    20. Altay Mussurov & Dena Sholk & G. Reza Arabsheibani, 2019. "Informal employment in Kazakhstan: a blessing in disguise?," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 9(2), pages 267-284, June.

    More about this item

    Keywords

    informality; shadow economy; mobility; exclusion;
    All these keywords.

    JEL classification:

    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izawol:journl:2022:n:59. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Institute of Labor Economics (IZA) (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.