IDEAS home Printed from https://ideas.repec.org/a/sos/sosjrn/060105.html
   My bibliography  Save this article

Integrating the Informal Sector into the Formal Economy: Some Policy Implications

Author

Listed:
  • Vuslat Us

Abstract

This study presents a survey of studies on informal sector with special emphasis on country experiences on integration of informal economic activities. Informal sector is a controversial topic since for many scholars, informal economic activities distort economy while according to others, it may contribute to economic growth. Yet, there is a growing consensus on the necessity to promote the informal sector on account of its importance with respect to employment and poverty issues alike. The previous experiences on integrating informal sector into the formal economy show that formalization schemes are not guaranteed from the viewpoint of the organized sectors, but rather by the benefits that access to formality may bring in fostering the development of informal activities and the relevant parties. Yet, oversight campaigns targeting informal activities are often overrated by the need to widen the tax base, cut down on tax evasion and punish illegality. In the Turkish economy context, the low levels of tax revenues despite high tax rates suggest that Turkish economy is on the right side of the Laffer curve. Therefore policymakers should seek ways to extend the tax base.

Suggested Citation

  • Vuslat Us, 2006. "Integrating the Informal Sector into the Formal Economy: Some Policy Implications," Sosyoekonomi Journal, Sosyoekonomi Society, issue 2006-1.
  • Handle: RePEc:sos:sosjrn:060105
    as

    Download full text from publisher

    File URL: http://dergipark.gov.tr/download/article-file/197593
    Download Restriction: no

    References listed on IDEAS

    as
    1. Fethi Ogunc & Gokhan Yilmaz, 2000. "Estimating The Underground Economy In Turkey," Discussion Papers 0004, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    2. Alan Reynolds, 1985. "Some International Comparisons of Supply-Side Tax Policy," Cato Journal, Cato Journal, Cato Institute, vol. 5(2), pages 543-569, Fall.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Informal Sector; Integration; Employment; Poverty; Turkish Economy; Laffer Curve.;

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

    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:sos:sosjrn:060105. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Aysen Sivrikaya). General contact details of provider: http://www.sosyoekonomijournal.org/home.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.