nep-iue 2016-06-14 papers

on Informal and Underground Economics

Issue of 2016‒06‒14
five papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

Workforce Composition, Productivity, and Labor Regulations in a Compensating Differentials Theory of Informality By Haanwinckel, Daniel; Soares, Rodrigo R.
Behavioral interventions in tax compliance : evidence from Guatemala By Kettle,Stewart; Hernandez,Marco; Ruda,Simon; Sanders,Michael
This paper studies potential economic effect of the informal sector, stemming from two factors: first, that informal workers, rural migrants, bring not only their labour supply with them, but also their consumption demands. Second, that informal workers may have a comparative advantage in the production of local goods. The paper then provides some descriptive statistics on the Informal workers share in the Cameroonian labour force, by industry, region, as well as on their branches distribution. Using data on a sample of microenterprises located in Douala and Yaounde between 2001 and 2010 matched with Rural and Urban Youth Support Program (RUYSP) and the National Employment Fund (NEF) data, the paper find some evidence that rural workers inflows boost employment in the retail sector, which is non-traded and a non-intensive user of informal labour. The paper also find that informalisation is associated with greater stand-alone retail stores, and a fewer number of large and in particular big-box retailers – evidence that likely corroborate a diversityenhancing effect of informalisation. Finally, focusing more sharply on the agricultural sector, for which we can better identify the types of products consumed by customers, the authors indicate that informalisation is associated with increased product diversity of agricultural sellers. By Mathurin Tchakounte Njoda; Eric Patrick Feubi Pamen
COMO A ECONOMIA INFORMAL AFETA A TAXAÇÃO ÓTIMA DO CAPITAL? By RODOLFO DINIS RIGATO
EFEITOS DA AMPLIAÇÃO DOS DIREITOS TRABALHISTAS SOBRE A FORMALIZAÇÃO, JORNADA DE TRABALHO E SALÁRIOS DAS EMPREGADAS DOMÉSTICAS By JOANA SIMOES DE MELO COSTA; ANA LUIZA NEVES DE HOLANDA BARBOSA; GUILHERME ISSAMU HIRATA

Workforce Composition, Productivity, and Labor Regulations in a Compensating Differentials Theory of Informality

By:	Haanwinckel, Daniel (University of California, Berkeley); Soares, Rodrigo R. (Sao Paulo School of Economics)
Abstract:	We develop a search model of informal labor markets with worker and firm heterogeneity, intra-firm bargaining with imperfect substitutability across types of workers, and a comprehensive set of labor regulations, including minimum wage. Stylized facts associated with the informal sector, such as smaller firms and lower wages, emerge endogenously as firms and workers decide whether to comply with regulations. Imperfect substitutability across types of workers and decreasing returns to scale enable the model to reproduce empirical patterns incompatible with existing frameworks in the literature: the presence of skilled and unskilled workers in the formal and informal sectors, the rising share of skilled workers by firm size, and the declining formal wage premium by skill level. These features also allow us to analyze the equilibrium responses to changes in the demand and supply of different types of labor. We estimate the model using Brazilian data and show that it closely reproduces the decline in informality observed between 2003 and 2012. The change in the composition of the labor force appears as the main driving force behind this phenomenon. We illustrate the use of the model for policy analysis by assessing the effectiveness of a progressive payroll tax in reducing informality.
Keywords:	informality, labor market, search, minimum wage, compensating differentials, Brazil
JEL:	J24 J31 J46 J64 O17
Date:	2016–05
URL:	http://d.repec.org/n?u=RePEc:iza:izadps:dp9951&r=iue

Behavioral interventions in tax compliance : evidence from Guatemala

By:	Kettle,Stewart; Hernandez,Marco; Ruda,Simon; Sanders,Michael
Abstract:	This paper presents results from a large (43,387) nationwide randomized controlled trial in Guatemala that used reminders to promote tax compliance. The trial varied the letter received by taxpayers (individuals and firms) who had failed to pay their income tax for the 2013 tax year. Taxpayers were randomly allocated to receive either no letter, the letter originally used by the Guatemalan Tax Authority, or four letter variants adapted using behavioral design. The study finds that although all letters increased the rate of declaration, only two of the letters were successful at increasing the rate of payment and the average amount paid per letter received. The best performing treatments were a deterrent message framing non-declaration as an intentional and deliberate choice, rather than oversight (designed to overcome status quo bias), and a social norms message that referred to the 64.5 percent of taxpayers that had already paid this tax (join the status quo). These two interventions increased the rate of payment as well as the average amount paid conditional on paying, overall more than tripling tax receipts. The paper estimates that if sent to all taxpayers in the sample, in 11 weeks the social norms letter would have generated additional tax revenues of approximately US$760,000, which is 36 times the cost of sending the letters. The effects are persistent and remain at 12 month follow up, suggesting the letters are effective in increasing revenue for the tax authority rather than just bringing tax receipts forward.
Keywords:	Debt Markets,Tax Law,Taxation&Subsidies,Emerging Markets,Fiscal Adjustment
Date:	2016–06–01
URL:	http://d.repec.org/n?u=RePEc:wbk:wbrwps:7690&r=iue

This paper studies potential economic effect of the informal sector, stemming from two factors: first, that informal workers, rural migrants, bring not only their labour supply with them, but also their consumption demands. Second, that informal workers may have a comparative advantage in the production of local goods. The paper then provides some descriptive statistics on the Informal workers share in the Cameroonian labour force, by industry, region, as well as on their branches distribution. Using data on a sample of microenterprises located in Douala and Yaounde between 2001 and 2010 matched with Rural and Urban Youth Support Program (RUYSP) and the National Employment Fund (NEF) data, the paper find some evidence that rural workers inflows boost employment in the retail sector, which is non-traded and a non-intensive user of informal labour. The paper also find that informalisation is associated with greater stand-alone retail stores, and a fewer number of large and in particular big-box retailers – evidence that likely corroborate a diversityenhancing effect of informalisation. Finally, focusing more sharply on the agricultural sector, for which we can better identify the types of products consumed by customers, the authors indicate that informalisation is associated with increased product diversity of agricultural sellers.

By:	Mathurin Tchakounte Njoda; Eric Patrick Feubi Pamen (FSEG, University of Ngaoundere)
Keywords:	Informal sector, labour supply, demand, product diversity
JEL:	J2 E26 O17 D51 R32
Date:	2016–04
URL:	http://d.repec.org/n?u=RePEc:sko:wpaper:bep-2016-06&r=iue

COMO A ECONOMIA INFORMAL AFETA A TAXAÇÃO ÓTIMA DO CAPITAL?

By: RODOLFO DINIS RIGATO

Date: 2016

URL: http://d.repec.org/n?u=RePEc:anp:en2015:081&r=iue
EFEITOS DA AMPLIAÇÃO DOS DIREITOS TRABALHISTAS SOBRE A FORMALIZAÇÃO, JORNADA DE TRABALHO E SALÁRIOS DAS EMPREGADAS DOMÉSTICAS

By: JOANA SIMOES DE MELO COSTA; ANA LUIZA NEVES DE HOLANDA BARBOSA; GUILHERME ISSAMU HIRATA

Date: 2016

URL: http://d.repec.org/n?u=RePEc:anp:en2015:236&r=iue

This nep-iue issue is ©2016 by Catalina Granda Carvajal. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.

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By:	RODOLFO DINIS RIGATO
Date:	2016
URL:	http://d.repec.org/n?u=RePEc:anp:en2015:081&r=iue

By:	JOANA SIMOES DE MELO COSTA; ANA LUIZA NEVES DE HOLANDA BARBOSA; GUILHERME ISSAMU HIRATA
Date:	2016
URL:	http://d.repec.org/n?u=RePEc:anp:en2015:236&r=iue