IDEAS home Printed from https://ideas.repec.org/p/ost/wpaper/296.html

Revealed Informal Activity

Author

Listed:
  • Ralitza Dimova

  • Ira N. Gang

    (Osteuropa-Institut, Regensburg (Institut for East European Studies))

  • John Landon-Lane

Abstract

What does it mean to be in the informal sector? Many characterizations have been used in the literature, for example, firms that are unregistered or employ a small workforce or firms/economic enterprises that do not have access to formal capital markets. But many people participate in both formal and informal activities, while classification of partici-pation is often based on primary employment. This creates limitations to the analytical power of existing measures of informality. We develop a method for assigning house-holds to the informal sector by inferring informal sector activity using income and ex-penditure surveys. We apply this method to the case of Bulgaria using LSMS income and expenditure surveys before and after a significant economic reform and compare it to those made using other indicators of informal sector activity. Our work shows that the informal sector acts as a buffer for households during periods of crisis when formal sector employment opportunities are limited. It shows the limitations of alternative styl-ized measures of informality in assessing the vulnerability of households involved in the informal sector, especially during periods of extreme economic hardship.

Suggested Citation

  • Ralitza Dimova & Ira N. Gang & John Landon-Lane, 2011. "Revealed Informal Activity," Working Papers 296, Leibniz Institut für Ost- und Südosteuropaforschung (Leibniz Institute for East and Southeast European Studies).
    • Handle: RePEc:ost:wpaper:296
    as

    Download full text from publisher

    File URL: http://www.oei-dokumente.de/publikationen/wp/wp-296.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ira N. Gang & Ralitza Dimova, 2004. "Self-Selection And Earnings During Volatile Transition," Departmental Working Papers 200409, Rutgers University, Department of Economics.
    2. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-535, June.
    3. Michael Grimm & Isabel Günther, 2005. "Inter- and Intra-household Linkages Between the Informal and Formal Sector: a Case Study for Urban Burkina Faso," WIDER Working Paper Series RP2005-14, World Institute for Development Economic Research (UNU-WIDER).
    4. Ralitza Dimova & Ira N. Gang & John S. Landon-Lane, 2005. "The Informal Sector During Crisis and Transition," WIDER Working Paper Series RP2005-18, World Institute for Development Economic Research (UNU-WIDER).
    5. Pietro Garibaldi & Mattia Makovec & Gabriella Stoyanova, 2001. "From Transition to EU Accession : The Bulgarian Labor Market during the 1990s," World Bank Publications - Books, The World Bank Group, number 13946, April.
    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. Peter Huber & Ulugbek Rahimov, 2017. "The Self-Selection of Workers to the Formal and Informal in Transition Economies: Evidence from Tajikistan," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 67(2), pages 140-164, April.
    2. Ceyhun Elgin & Ferda Erturk, 2019. "Informal economies around the world: measures, determinants and consequences," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 9(2), pages 221-237, June.
    3. Douglas Amuli Ibale, 2020. "Earning structure and heterogeneity of the labor market: Evidence from DR Congo," LIDAM Discussion Papers IRES 2020037, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

    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. Ilhom Abdulloev & Ira N. Gang & John Landon-Lane, 2011. "Migration as a Substitute for Informal Activities: Evidence from Tajikistan," Working Papers 311, Leibniz Institut für Ost- und Südosteuropaforschung (Leibniz Institute for East and Southeast European Studies).
    2. Ralitza Dimova, 2008. "The impact of labour reallocation and competitive pressure on TFP growth: firm-level evidence from crisis and transition ridden Bulgaria," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(3), pages 321-338.
    3. Dimova, Ralitza & Gang, Ira N., 2007. "Self-selection and wages during volatile transition," Journal of Comparative Economics, Elsevier, vol. 35(3), pages 612-629, September.
    4. Mejia, Paula & Meléndez Arjona, Marcela, 2012. "Middle-Class Entrepreneurs and Social Mobility through Entrepreneurship in Colombia," IDB Publications (Working Papers) 4082, Inter-American Development Bank.
    5. Zheng, Liang & Zhao, Zhong, 2017. "What drives spatial clusters of entrepreneurship in China? Evidence from economic census data," China Economic Review, Elsevier, vol. 46(C), pages 229-248.
    6. Jan Wiers & Didier Chabaud, 2022. "Bibliometric analysis of immigrant entrepreneurship research 2009–2019," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 12(1), pages 441-464, December.
    7. Céline Bessière & Caroline De Paoli & Muriel Roger & Bénédicte Gouraud, 2011. "Les agriculteurs et leur patrimoine : des indépendants comme les autres ?," Économie et Statistique, Programme National Persée, vol. 444(1), pages 55-74.
    8. Rachel G. Childers, 2011. "Being One'S Own Boss: How Does Risk Fit In?," The American Economist, Sage Publications, vol. 56(1), pages 48-58, May.
    9. Milo Bianchi, 2012. "Financial Development, Entrepreneurship, and Job Satisfaction," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 273-286, February.
    10. Michele Cincera & Lydia Greunz & Jean-Luc Guyot & Olivier Lohest, 2006. "Capital humain et processus de création d'entreprise: le cas des primo-créateurs wallons," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 49(2).
    11. Erik Stam & Roy Thurik & Peter van der Zwan, 2010. "Entrepreneurial exit in real and imagined markets," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(4), pages 1109-1139, August.
    12. Niels Bosma & Sander Wennekers, 2004. "Entrepreneurial Attitudes Versus Entrepreneurial Activities (GEM)," Scales Research Reports A200316, EIM Business and Policy Research.
    13. Hans K. Hvide & Benjamin F. Jones, 2018. "University Innovation and the Professor's Privilege," American Economic Review, American Economic Association, vol. 108(7), pages 1860-1898, July.
    14. Herz, Holger & Schunk, Daniel & Zehnder, Christian, 2014. "How do judgmental overconfidence and overoptimism shape innovative activity?," Games and Economic Behavior, Elsevier, vol. 83(C), pages 1-23.
    15. Poschke, Markus, 2013. "The Decision to Become an Entrepreneur and the Firm Size Distribution: A Unifying Framework for Policy Analysis," IZA Discussion Papers 7757, Institute of Labor Economics (IZA).
    16. Françoise Bastié & Sylvie Cieply & Pascal Cussy, 2013. "The entrepreneur’s mode of entry: the effect of social and financial capital," Small Business Economics, Springer, vol. 40(4), pages 865-877, May.
    17. Catalina Martínez & Valerio Sterzi, 2021. "The impact of the abolishment of the professor’s privilege on European university-owned patents," Industry and Innovation, Taylor & Francis Journals, vol. 28(3), pages 247-282, March.
    18. Hsu, David H., 2007. "Experienced entrepreneurial founders, organizational capital, and venture capital funding," Research Policy, Elsevier, vol. 36(5), pages 722-741, June.
    19. Sarah Brown & Lisa Farrell & Mark N. Harris & John G. Sessions, 2006. "Risk preference and employment contract type," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 169(4), pages 849-863, October.
    20. Jolanda Hessels & José María Millán & Concepción Román, 2015. "The Importance of Being in Control of Business: Work Satisfaction of Employers, Own-account Workers and Employees," Tinbergen Institute Discussion Papers 15-047/VII, Tinbergen Institute.

    More about this item

    JEL classification:

    • 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:ost:wpaper:296. 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: WP Series Editor (email available below). General contact details of provider: https://edirc.repec.org/data/osteide.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.