nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2011‒08‒29
four papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Endogenous Norm Formation Over the Life Cycle – The Case of Tax Evasion By Nordblom, Katarina; Zamac, Jovan
  2. Towards a Better Understanding of the Informal Economy By Dan Andrews; Aida Caldera Sánchez; Åsa Johansson
  3. Efectos de la Crisis Financiera sobre los Sistemas de pensiones en América Latina By Mario Marcel; Waldo Tapia Troncoso
  4. Migration Magnet: The Role of Work Experience in Rural-Urban Wage Diff erentials in Mexico By John P. Haisken-DeNew; Maren M. Michaelsen

  1. By: Nordblom, Katarina (Uppsala Center for Fiscal Studies); Zamac, Jovan (Uppsala Center for Fiscal Studies)
    Abstract: This paper offers an explanation to why the general observation that elderly hold stronger moral attitudes than young ones may be an age rather than a cohort effect. We apply mechanisms from social psychology to explain how personal norms may evolve over the life cycle. We assume that people update their norms influenced by their own past behavior (e.g., cognitive dissonance) and/or by the attitudes of their peers (normative conformity). We apply the theory on actual norm distributions for young and old concerning tax evasion. Allowing for heterogeneous updating of norms where only those who identify with their network are actually conforming with it, while the others are only influenced by their own past behavior, we can explain the difference between young and old people’s moral values as an age effect through endogenous norm formation.
    Keywords: Social norms; Endogenous norms; Tax evasion; Cognitive dissonance; Self-signaling; Normative conformity
    JEL: H26
    Date: 2011–08–19
  2. By: Dan Andrews; Aida Caldera Sánchez; Åsa Johansson
    Abstract: It is important to understand the nature and drivers of informality, as its social and economic consequences are wide-ranging. This paper critically reviews the current state of cross-country research on informality and discusses how existing data sources can be more effectively employed and extended to shed light on the link between public policies and informality. A number of interesting findings emerge. The informal economy is multi-faceted and a wide range of definitions and measures are required to capture its diverse activities. However, most existing – and widely used – cross-country estimates of informality suffer from large measurement problems, which reduce the reliability of existing empirical evidence on the extent and drivers of informality. Accordingly, future research on informality should be closely linked to obtaining better data, particularly at the household and firm levels.<P>Vers une meilleure compréhension de l'économie informelle<BR>Il est important de comprendre la nature et les déterminants de l'économie informelle, tant ses conséquences sociales et économiques sont vastes. Ce document examine d’une façon critique l'état actuel de la recherche sur l'économie informelle, et examine la façon d'utiliser plus efficacement les données existantes et d'étendre les bases de données pour mieux établir un lien entre les politiques publiques et l'informalité. Quelques conclusions intéressantes se dégagent de cette étude. L'économie informelle présente de multiples facettes et un large éventail de définitions et de mesures sont nécessaires pour saisir ses diverses formes. Cependant, la plupart des indicateurs disponibles - et largement utilisés - souffrent de problèmes de mesurabilité, qui réduisent la fiabilité des données empiriques existantes et les résultats sur l'ampleur et les déterminants de l'informalité. Ainsi, les futures recherches sur l'informalité devraient recueillir de meilleures données, en particulier sur les ménages et les entreprises.
    Keywords: property rights, informal economy, tax evasion, measurement issues, regulations, économie informelle, mesurabilité, droits de propriété, régulations, évasion fiscale
    JEL: H11 H26 J53 K0 O17
    Date: 2011–05–30
  3. By: Mario Marcel; Waldo Tapia Troncoso
    Abstract: Los efectos de la reciente crisis financiera internacional en los fondos de pensiones de América Latina muestran que ésta no solo ha afectado su rentabilidad sino que también la densidad de las cotizaciones como producto del mayor desempleo, informalidad y evasión de aportes a que ha dado lugar la recesión.
    Keywords: IDB-WP-152 -- Pensiones, America Latina, Latinoamerica, Crisis financiera
    Date: 2010–12
  4. By: John P. Haisken-DeNew; Maren M. Michaelsen
    Abstract: This study estimates separate selectivity bias corrected wage equations for formal and informal workers in rural and urban Mexico using data from the Mexican Family Life Survey (MxFLS). We control for diff erent potential selection patterns using Probit and Multinominal logit models in the fi rst step in which health, personality traits and family characteristics serve as exclusion restrictions for working per se and working in the formal sector. Oaxaca-Blinder Decompositions show that rural-urban wage inequality in the formal and informal sector is determined by diff erences in observable human capital. In the informal sector, the wage diff erential is mainly explained by diff erences in returns to experience. Furthermore, we analyse rural-to-urban migrants‘ labour market performance. The fi ndings suggest that rural-to-urban migration will continue and the informal sector will further increase.
    Keywords: Returns to experience; rural-urban wage diff erentials; informality; internal migration; Mexico
    JEL: J24 J31 R23 Q15
    Date: 2011–06

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