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Informality and social protection : preliminary results from pilot surveys in Bulgaria and Colombia

Author

Listed:
  • Peracchi, Franco
  • Perotti, Valeria
  • Scarpetta, Stefano

Abstract

There is a wide agreement on the fact that a large informal economy leaves many individuals without social protection and reduces government's tax revenue and social security contributions. However, it remains an open question what really drives informality, namely whether workers are simply trapped out of the formal sector or, at least some of them, choose it because it offers better alternatives than a formal job. The policy implications are clearly different in the two cases. In order to shed light on this important issue, the authors propose a household survey instrument to assess the links between informality and social protection. It can be implemented either through a stand-alone survey or by adding a specific module to an existing general survey such as the World Bank's Living Standards Measurement Study. After describing the main survey instrument, the study presents the results of two pilot surveys, carried out in Bulgaria and Colombia, to test the effectiveness of the questionnaire and improve its design. After the introduction is presented, the remainder of the paper is organized as follows. Section 2 discusses the design of the basic questionnaire on the informal sector. Since the instrument can be used also as a stand-alone survey, some questions are quite standard both in their content and format: in what follows, the study will focus on the parts that are not. Section 3 describes in detail the pilot surveys and the adaptation of the questionnaire to country-specific issues. Section 4 asks how representative is the sample of the two pilots. Section 5 presents some descriptive results emerging from the two pilots, and Section 6 examines how results differ according to informality status of respondents. Finally, Section 7 offers concluding remarks.

Suggested Citation

  • Peracchi, Franco & Perotti, Valeria & Scarpetta, Stefano, 2007. "Informality and social protection : preliminary results from pilot surveys in Bulgaria and Colombia," Social Protection and Labor Policy and Technical Notes 41541, The World Bank.
  • Handle: RePEc:wbk:hdnspu:41541
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    Cited by:

    1. Piggott, John & Sane, Renuka, 2009. "Indexing pensions," Social Protection and Labor Policy and Technical Notes 52445, The World Bank.
    2. Leibfritz, Willi, 2011. "Undeclared economic activity in central and eastern Europe -- how taxes contribute and how countries respond to the problem," Policy Research Working Paper Series 5923, The World Bank.
    3. Alderman, Harold & Yemtsov, Ruslan, 2012. "Productive role of safety nets : background paper for the World Bank 2012-2022 social protection and labor strategy," Social Protection and Labor Policy and Technical Notes 67609, The World Bank.
    4. Milan Vodopivec & Lilijana Madjar & Primoz Dolenc, 2009. "Non-performance of the Severance Pay Program in Slovenia," Financial Theory and Practice, Institute of Public Finance, vol. 33(1), pages 89-102.
    5. Almeida, Rita & Carneiro, Pedro, 2009. "Enforcement of labor regulation and firm size," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 28-46, March.
    6. Woo, Kye Lee, 2009. "Productivity increases in SMEs : with special emphasis on in-service training of workers in Korea," Social Protection and Labor Policy and Technical Notes 51251, The World Bank.
    7. Vodopivec, Milan & Arunatilake, Nisha, 2008. "Population aging and the labor market : the case of Sri Lanka," Social Protection and Labor Policy and Technical Notes 44927, The World Bank.
    8. Woolford, Geoff, 2009. "Social protection for migrants from the Pacific Islands in Australia and New Zealand," Social Protection and Labor Policy and Technical Notes 49174, The World Bank.
    9. Milan Vodopivec & Primoz Dolenc:, 2008. "Live Longer, Work Longer: Making It Happen in the Labor Market," Financial Theory and Practice, Institute of Public Finance, vol. 32(1), pages 65-81.
    10. Ferrer, Ana M. & Riddell, W. Craig, 2009. "Unemployment insurance savings accounts in Latin America : overview and assessment," Social Protection and Labor Policy and Technical Notes 49173, The World Bank.
    11. Milan Vodopivec, 2013. "Introducing unemployment insurance to developing countries," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.
    12. Almeida, Rita & Carneiro, Pedro, 2009. "The return to firm investments in human capital," Labour Economics, Elsevier, vol. 16(1), pages 97-106, January.
    13. Melanie Khamis, 2012. "A Note On Informality In The Labour Market," Journal of International Development, John Wiley & Sons, Ltd., vol. 24(7), pages 894-908, October.
    14. James, Estelle, 2009. "Rethinking survivor benefits," Social Protection and Labor Policy and Technical Notes 52919, The World Bank.
    15. Chae, ChangKyun & Chung, Jaeho, 2009. "Pre-employment vocational education and training in Korea," Social Protection and Labor Policy and Technical Notes 52186, The World Bank.
    16. Makhema, Mpho, 2009. "Social protection for refugees and asylum seekers in the Southern Africa Development Community (SADC)," Social Protection and Labor Policy and Technical Notes 49168, The World Bank.
    17. Alvaro Forteza, 2010. "The Portability of Pension Rights: General Principles and the Caribbean Case," Development Policy Review, Overseas Development Institute, vol. 28(2), pages 237-255, March.
    18. Rita Cappariello & Roberta Zizza, 2010. "Dropping the Books and Working Off the Books," LABOUR, CEIS, vol. 24(2), pages 139-162, June.
    19. Avato, Johanna & Koettl, Johannes & Sabates-Wheeler, Rachel, 2009. "Definitions, good practices, and global estimates on the status of social protection for international migrants," Social Protection and Labor Policy and Technical Notes 49172, The World Bank.
    20. Perotti, Valeria & Sánchez Puerta, Maria Laura, 2009. "Personal Opinions about the Social Security System and Informal Employment : Evidence from Bulgaria," Social Protection and Labor Policy and Technical Notes 89563, The World Bank.
    21. Valdés-Prieto, Salvador, 2008. "A theory of contribution density and implications for pension design," Social Protection and Labor Policy and Technical Notes 90344, The World Bank.
    22. Rofman, Rafael & Fajnzylber, Eduardo & Herrera, German, 2008. "Reforming the pension reforms : the recent initiatives and actions on pensions in Argentina and Chile," Social Protection and Labor Policy and Technical Notes 90346, The World Bank.
    23. Kuddo, Arvo, 2009. "Structural educational reform : evidence from a teacher's displacement program in Armenia," Social Protection and Labor Policy and Technical Notes 47164, The World Bank.
    24. Barrett , Christopher B & Carter , Michael R & Ikegami , Munenobu, 2008. "Poverty traps and social protection," Social Protection and Labor Policy and Technical Notes 42752, The World Bank.
    25. Koettl, Johannes, 2009. "Human trafficking, modern day slavery, and economic exploitation," Social Protection and Labor Policy and Technical Notes 49802, The World Bank.

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