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Short, Long and Spatial Dynamics of Informal Employment

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  • Paolo Di Caro
  • Giuseppe Nicotra

Abstract

Di Caro P. and Nicotra G. Short, long and spatial dynamics of informal employment, Regional Studies. This paper analyses regional shadow labour markets. Cross-regional migration flows are introduced in a stochastic two-sector model used to study the effects of regional interactions on informality. Empirical results show that informal activities across Italian regions are driven by the inefficient provision of public goods and high taxes. Regional connections are found to be significant. Place-specific reactions of informal employment to national shocks in the official economy are investigated, finding that the informal sector can act as a complement to or a substitute for formal activities. The summary of the results and policy conclusions are then discussed.

Suggested Citation

  • Paolo Di Caro & Giuseppe Nicotra, 2016. "Short, Long and Spatial Dynamics of Informal Employment," Regional Studies, Taylor & Francis Journals, vol. 50(11), pages 1804-1818, November.
  • Handle: RePEc:taf:regstd:v:50:y:2016:i:11:p:1804-1818
    DOI: 10.1080/00343404.2015.1072274
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    References listed on IDEAS

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    1. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    2. Edoardo Di Porto & Leandro Elia, 2015. "Estimating Labor Demand Function in the Presence of Undeclared Labour: A Look Behind the Curtain," CSEF Working Papers 389, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    3. Bruno Chiarini & Elisabetta Marzano, 2007. "Structural and Cyclical Patterns of Underground Labour Input in Italy from 1980 to 2004," Discussion Papers 3_2007, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    4. Edoardo Di Porto & Leandro Elia & Cristina Tealdi, 2013. "The "emersion" effect: an ex post and ex ante social program evaluation on labor tax evasion in Italy," Working Papers 2/2013, IMT Institute for Advanced Studies Lucca, revised Jun 2013.
    5. Edoardo Di Porto & Vincent Merlin & Sonia Paty, 2013. "Cooperation among local governments to deliver public services: a "structural" bivariate response model with fixed effects and endogenous covariate," Post-Print halshs-00861226, HAL.
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    Cited by:

    1. Gustavo A. García & Edgar Julián Muñoz González & Stefany Gallego Ortiz, 2018. "Análisis Espacial de la Informalidad Laboral a Nivel Intra-urbano," Documentos de Trabajo CIEF 016499, Universidad EAFIT.

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