National governments and their development partners have considered microcredit as a strategic tool for vulnerable populations. Easy access to finance increases the client’s ability to invest and allows clients to use resources to change their behaviour, increase their business opportunities...

The phenomenon of informality in Latin America is strongly conditioned by the main structural axes of the social inequality matrix. It is a heterogeneous and multifaceted phenomenon in which socioeconomic, territorial, gender, age and ethnic/racial inequalities are manifested. Deeper analysis of...

Expansion of social protection reach among workers in the large informal economy represents a persisting and thorny challenge in the development context. In Mainland Tanzania, several domestically led policy reforms have been introduced to increasingly expand social protection for informal...

This paper aims to identify the determinants of revenue underreporting and their temporal evolution from a business perspective in formal firms located in an emerging country with high inflation (Argentina). We propose a conceptual model and we estimate it empirically using a logistic regression...

We examine the patterns and correlates of the productivity gap between male-owned and female-owned firms for informal enterprises in India. Female-owned firms are on average 45 per cent less productive than male-owned firms, with the clearest productivity gaps observed at the lower end of the...

This paper assesses the participation of female traders, safety factors, and existing policies and legislation in the informal sector in Tanzania. Primary data were obtained from 11 indepth interviews, 10 focused group discussions, and 236 structured questionnaires. The primary data were...

Despite the severe negative economic shock associated with the COVID-19 pandemic, evidence from many contexts points to a surge in sales on online platforms, as well as shifts in the composition of demand. This paper investigates how the pandemic has affected both the supply of and demand for...

Various studies found wage gaps between formal and informal sector workers even after controlling for a number of individual and firm level characteristics. It has also been shown that earnings differentials across these sectors are quite stable over the years. While there is limited amount of...

Many informal firms in developing countries would not be viable if they were to comply with the minimum wage law. This means the authorities have an incentive to turn a blind eye to nonenforcement in a substantial share of firms. We also survey enforcement mechanisms for the minimum wage across...

The relationship between shadow economy (or informal economy) and development has been extensively researched. But there is a lack of consensus on how institutional quality affects the size of informal economy in any country. Using the Kuznets Curve hypothesis we assess the relationship between...

The aim of this paper is to evaluate two contrasting ways of explaining and tackling undeclared work. The rational economic actor approach theorizes undeclared work as arising when the benefits of undertaking undeclared work outweigh the costs, and the policy focus is upon deterring undeclared...

The lingering policy dilemma facing many governments in sub-Saharan Africa in recent years is what can be done in the short to medium term to boost the output and incomes of individuals and enterprises in the informal sector, given the size and persistence of the sector in the region. In this...

While there is general agreement that regulatory avoidance is an important part of firms' decisions to produce in the informal sector, there is much less agreement on how regulation and enforcement affect firms' decisions on, inter alia, which sector they locate in, their employment decisions,...

Despite a sizeable literature on the labour market effects of maternity leave regulations on women in developed countries, how these policies affect women's work in developing countries with a large informal sector remains poorly understood. This study examines how extending the maternity leave...

This paper examines the relationship between the shadow economy and trade openness in Uganda, using autoregressive distributed lag bounds testing approach. We find that the shadow economy and trade openness have a long- and short-run relationship. These results hold even when alternative...

This paper investigates whether corruption has contributed to the rise of the shadow economy in Uganda. Using autoregressive distributed lag bounds testing approach and granger causality econometric methods we find a positive relationship between corruption and the size of the shadow economy in...

In Kenya, very little research has been carried out on the topic of the informal sector. This paper estimates the size of the Kenyan informal sector for the period 1970-2018. In light of our analysis of the stationary properties of the data, which suggests a mixture of I(0) and I(1) variables,...

This paper studies the impact of the COVID-19 crisis on the gendered dimensions of employment and mental health among urban informal-sector workers in India. First, we find that men's employment declined by 84 percentage points post-pandemic relative to pre-pandemic, while their monthly earnings...

We consider two vertical links between informal- and formal-sector firms and study their implications. In one case, the final products produced by the formal- and informal-sector firms are vertically differentiated in terms of quality, and the size of the informal sector demand is related to the...

Negotiations are a valuable and important tool for increasing the voice of workers in the informal economy. This paper provides empirical evidence from Africa, Asia and the Americas on negotiations and collective bargaining by workers in the informal economy. These practices demonstrate that...

Many empirical studies found wage gaps between formal and informal sector workers even after controlling for a number of individual and firm level characteristics. While there is limited amount of research considering the same question in the Turkish labor market, wage gap between formal and...

How does informal economic activity respond to increased financial inclusion? Does it become more entrepreneurial? Does access to new financing options change the gender configuration of informal economic activity and, if so, in what ways and what directions? We take advantage of nationwide data...

The informal sector has long been viewed as a locus of the disadvantaged, unskilled, and inexperienced workers in under-developed and developing economies. Workers in the informal sector, however, can learn skills and gain experience that could help them switch to better-paying jobs in the...

The street food market is a major source of food in developing countries, but is often characterized by unsafe food conditions. We investigate whether improvements in food safety can be achieved by providing information to vendors in the form of a training. Among randomly assigned groups of...

How does informal economic activity respond to increased financial inclusion? Does it become more entrepreneurial? Does access to new financing options change the gender configuration of informal economic activity and, if so, in what ways and what directions? We take advantage of nationwide data...

We use long-spanning individual longitudinal data to examine the long-term labour market outcomes of low-tier informal workers. We investigate their characteristics, calculate the extent of switching, and identify the characteristics of those who have switched. Finally, we estimate the earnings...

How does informal economic activity respond to increased financial inclusion? Does it become more entrepreneurial? Does access to new financing options change the gender configuration of informal economic activity and, if so, in what ways and what directions? We take advantage of nationwide data...

We present a model of offshoring of tasks to a developing nation, which is characterized by a minimum wage formal sector and a flexible wage informal sector. Some offshored tasks are outsourced by the formal sector to the lower wage informal sector. An improvement in the productivity in...

Tax morale was found in literature to shape tax compliance behaviour and to be significantly correlated with strategies of tax effort across countries. In addition views regarding the quality of institutions, the cost-benefit analysis on the use of tax revenues and the quality of governance...

This article reviews the recent literature in economics on small-scale entrepreneurship ("microentrepreneurship") in low-income countries. Major themes in the literature include the determinants and consequences of joining the formal sector; the impacts of access to credit and other financial...

The main objective of this paper is to contribute to in-depth literature on the relationship between growth and the informal sector in the presence of corruption. The impact of the interaction between growth and corruption on economic performance (increase or decrease of the informal sector)...

This paper is interested in explaining the causes of the simultaneous evolution between economic growth and informality. Using a large annual panel of African countries with a time series of 25 years, ours results show that when the corruption rate is above (below) a threshold of 1.3577,...

Expansion of social protection reach among workers in the large informal economy represents a persisting and thorny challenge in the development context. In Mainland Tanzania, several domestically led policy reforms have been introduced to increasingly expand social protection for informal...

The main objective of this paper is to contribute to in-depth literature on the relationship between growth and the informal sector in the presence of corruption. The impact of the interaction between growth and corruption on economic performance (increase or decrease of the informal sector)...

It is a well-established practice of many Sub-Sahara African (SSA) governments to aid entrepreneurs within both the formal and informal sectors in order to enhance their performance and growth. Unfortunately, there is no agreed method by which governments can differentiate between entrepreneurs...

This paper is interested in explaining the causes of the simultaneous evolution between economic growth and informality. Using a large annual panel of African countries with a time series of 25 years, ours results show that when the corruption rate is above (below) a threshold of 1.3577,...

The paper aims to assess the wage differential that would induce workers to switch between informal and formal sectors, analysing the informal labour market in the Colombian Caribbean region. Relying on the theory of equalising differences, we uncover which workers perceive the highest utility...

This paper estimates spatial wage curves for formal and informal workers in Turkey using individual level data from the Turkish Household Labor Force Survey (THLFS) provided by TURKSTAT for the period 2008-2014. Unlike previous studies on wage curves for formal and informal workers, we extend...