|
on Informal and Underground Economics |
| By: | Gabriel Ulyssea (Department of Economics PUC-Rio) |
| Date: | 2014–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:rio:texdis:632&r=iue |
| By: | Huikang Ying |
| Abstract: | This paper studies the interactions between urban labour informality and selective migration, and explores the consequences of productivity changes at both sectoral and individual levels. It proposes a general equilibrium model with heterogeneous workers to characterize the sizable agriculture sector and urban informality in developing economies, and discusses implications for wages and inequality. The model links the size of the urban informal sector to the distributions of individual productivity endowments. The finding suggests that improving average individual skills is an efficient way to alleviate urban underemployment. Equilibrium responses also indicate that changes in labour markets have only modest effects on wages and inequality. |
| Keywords: | Rural-urban migration, informal sector, productivity changes, wage inequality |
| JEL: | J24 O15 O17 |
| Date: | 2015–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:bri:uobdis:15/653&r=iue |
| By: | Lahcen, Mohammed Ait |
| Abstract: | In this thesis we try to understand the impact of some macroeconomic features of developing economies, in particular the existence of a large informal sector, on the reaction of these economies to different shocks. In order to achieve this objective, we derive a simple New Keynesian Small Open Economy DSGE model featuring multiple sectors with monopolistic competition, nominal rigidities in prices, a fixed exchange regime and the introduction of a simple medium-sized informal sector. We estimate the model with Bayesian estimation using quarterly data from Morocco. The model does a good job in capturing the unconditional second moments of the data. It is also able to replicate well some of the historical data series. Estimation results suggest a relatively weaker role of price rigidities in the non-tradables sector. It also suggests a much more aggressive reaction of the central bank to inflationary pressures with a relatively higher weight given to fluctuations in inflation compared with fluctuations in output and the real exchange rate. The study of the Bayesian impulse-response functions confirm the shock absorbing role of the informal sector for productivity shocks and pleads towards excluding imported inflation from the inflation target. However, no evidence is found of a shock absorbing role of the informal sector in the case of interest rate or foreign demand shocks. |
| Keywords: | DSGE, developing economies, informality, small open economy, new-keynesian |
| JEL: | E26 E31 E32 E37 E52 E58 |
| Date: | 2014–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63404&r=iue |
| By: | Vorobyev Pavel |
| Abstract: | TInformal economy in Russian regions is measured using two approaches: 1) cross-section regression model for electricity consumption in Russian regions; 2) augmented electricity dynamics approach. 1) Regression model is applied for electricity consumption in production of goods and services (total electricity consumption less losses, less households’ consumption). Model was estimated on the basis of regional data in 2011. It allowed estimating informal economy share in 67 Russian regions in 2011. The average informal economy share is estimated at 40% with standard deviation 18 percentage points. These results show high positive correlation with usual proxies for informal economy such as corruption, unemployment, and especially dependency of regional budget from Federal transfers. 2) Augmented electricity dynamics approach is developed to estimate dynamics of informal economy share in regions over 2004-2011. Comparing to traditional method in the literature, it takes into account changes in regional industrial structure and electricity intensity of GRP. It leads to more accurate estimates. It has been shown that the share of informal economy in Russia diminished from 55% in 2004 to 40% in 2011 due to the growth of formal sector. Only 16 from 65 regions witnessed an increase in informal economy share over the period. |
| JEL: | R11 |
| Date: | 2015–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:eer:wpalle:15/02e&r=iue |
| By: | Liu,Xuepeng; Shi,Huimin; Ferrantino,Michael Joseph |
| Abstract: | Many production firms use intermediary trading firms to export indirectly. This paper uses Chinese export data at the transaction level to investigate the tax evasion motive through indirect trade. The paper provides strong evidence that, under China's partial export value-added tax rebate policy, production firms can effectively evade value-added taxes by underreporting their selling prices to domestic intermediary trading firms, especially when they sell differentiated products. Even for a moderate level of underreporting, the revenue loss is close to one billion U.S. dollars. The paper also finds that such underreporting behavior through domestic intermediaries may be associated with cross-border evasion through underreporting export values to foreign partners. In addition, the results indicate that the evasion motive is stronger for larger transactions. |
| Keywords: | Economic Theory&Research,Debt Markets,Trade Policy,Markets and Market Access,Emerging Markets |
| Date: | 2015–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7232&r=iue |
| By: | Céline CARRERE (Université de Genève); Christopher GRIGORIOU (Fonds Monétaire international) |
| Abstract: | Empirical studies on international trade extensively rely on the use of mirror trade statistics, i.e data reported by trading partners. However, while extensive reviews have been done on how to use mirror data to compensate poor quality data or to proxy transportation costs, very few has been done to see if and how the gap between the declared and mirrored disaggregated bilateral data could be used to capture informal cross border trade. Indeed, beyond the valid logistic reasons to explain why reported bilateral export flows from one country do not match the respective reported imports of its partner country, deliberate misreporting could significantly contribute to explain those discrepancies, either through misevaluation or misclassification of the imported goods, notably to evade tariffs and taxes. This paper proposes a review of the reasons for the gap between matched partner data, before investigating stylized facts from UN-COMTRADE data. Empirical analysis relying on econometrical panel data over a worldwide set of data at the 6 digits level evidences that discrepancies from the mirror data are not erratically driven. A statistically significant relationship between the gap and macroeconomic variables such bilateral distance, gdp per capita, average tariffs, foreign direct investments (FDI), implementation of regional trade agreements (RTA) have been evidenced. Based on these preliminary correlations, a probit has been run on orphan imports (imports reported by importing country without equivalent by exporting country) and predicts accurately up to 68% of these misclassification cases. Thus, part of the gap can be predicted by macroeconomic variables, some of them suggesting a relationship between cross-border trade flows misreporting and fraud opportunities to evade tariffs and taxes. |
| JEL: | F14 C33 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:2052&r=iue |
| By: | Céline CARRERE (University of Geneva); Christopher GRIGORIOU (International Monetary Fund) |
| Abstract: | Empirical studies on international trade extensively rely on the use of mirror trade statistics, i.e data reported by trading partners. However, while extensive reviews have been done on how to use mirror data to compensate poor quality data or to proxy transportation costs, very few has been done to see if and how the gap between the declared and mirrored disaggregated bilateral data could be used to capture informal cross border trade. Indeed, beyond the valid logistic reasons to explain why reported bilateral export flows from one country do not match the respective reported imports of its partner country, deliberate misreporting could significantly contribute to explain those discrepancies, either through misevaluation or misclassification of the imported goods, notably to evade tariffs and taxes. This paper proposes a review of the reasons for the gap between matched partner data, before investigating stylized facts from UN-COMTRADE data. Empirical analysis relying on econometrical panel data over a worldwide set of data at the 6 digits level evidences that discrepancies from the mirror data are not erratically driven. A statistically significant relationship between the gap and macroeconomic variables such bilateral distance, gdp per capita, average tariffs, foreign direct investments (FDI), implementation of regional trade agreements (RTA) have been evidenced. Based on these preliminary correlations, a probit has been run on orphan imports (imports reported by importing country without equivalent by exporting country) and predicts accurately up to 68% of these misclassification cases. Thus, part of the gap can be predicted by macroeconomic variables, some of them suggesting a relationship between cross-border trade flows misreporting and fraud opportunities to evade tariffs and taxes. |
| JEL: | F14 C33 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:2053&r=iue |
| By: | Matthew Collin; Justin Sandefur; Andrew Zeitlin |
| Abstract: | When the Tanzanian government formalized over 200,000 informal land claims by granting leasehold titles to residents of unplanned settlements in Dar es Salaam in 2004, a few neighborhoods in the initial plan were excluded due to missing satellite photos. We examine the impact of this low-cost, large-scale titling intervention a decade later in a regression discontinuity design using new survey data collected on either side of the arbitrary boundary created by the missing photos. We find significant, positive effects on housing investment, and indicative but not statistically robust increases in tenure security and reductions in land sales. There is no evidence that titles improved access to credit markets. |
| Keywords: | land titling, formalization, natural experiment, Tanzania |
| JEL: | J16 K11 O12 O18 Q15 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2015-09&r=iue |