nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2011‒10‒22
four papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Formalizando la informalidad empresarial en Colombia By Franz Hamann; Luis-Fernando Mejía
  2. Effects of the 2008-09 economic crisis on labor markets in Mexico By Freije, Samuel; Lopez-Acevedo, Gladys; Rodriguez-Oreggia, Eduardo
  3. Optimal income taxation with tax avoidance By Casamatta, Georges
  4. Self-employment flows and persistence: a European comparative analysis By Taylor, Mark P.

  1. By: Franz Hamann; Luis-Fernando Mejía
    Abstract: Este trabajo presenta un modelo de equilibrio parcial dinámico de emprendedores que escogen establecerse en el sector formal o en el informal. Esta decisión es el resultado de un análisis de los costos y beneficios estáticos y dinámicos asociados a operar en cada uno de los dos sectores que incluyen los costos salariales, las tasas impositivas, los costos de crear y liquidar una empresa formal y la posibilidad de acceder al sistema financiero. El modelo es calibrado para replicar tanto el promedio como una medida de la dispersión del valor agregado relativo del sector formal versus el sector informal en Colombia para el período 2000-2007. Posteriormente, el trabajo investiga el impacto de diversas políticas de formalización sobre el tamaño relativo del sector formal. Las simulaciones encuentran que reducciones en los costos asociados a operar en el sector formal pueden conducir a aumentos considerables en el tamaño relativo del sector formal. El costo de montar una empresa, en especial, tiene efectos grandes sobre el tamaño de la formalidad. Los resultados sugieren, entonces, que el marco legal de regulación del sector formal en Colombia actúa como una barrera importante para la formalización empresarial.
    Keywords: Formalidad, informalidad, políticas de formalización empresarial. Classification JEL: E2, E6, H3, J4.
  2. By: Freije, Samuel; Lopez-Acevedo, Gladys; Rodriguez-Oreggia, Eduardo
    Abstract: The 2008-09 economic crisis has had a long-lasting negative impact on the Mexican economy. This paper examines labor market dynamics in Mexico in light of the crisis. The labor market has been characterized in recent years by low relative unemployment, but high levels of informal jobs, low-growth, and almost stagnant real wages. In this context, the crisis destroyed a wide number of formal jobs, and even informal, increasing the unemployment rates to pre-crisis levels. Manufacturing was the sector that endured the largest job losses during the crisis and wages decreased for all sectors. The government of Mexico implemented a variety of programs to cope with the crises. However, these measures were too limited to counteract the large negative impact of the crisis on labor markets.
    Keywords: Labor Markets,Labor Policies,Population Policies,Labor Standards,Economic Theory&Research
    Date: 2011–10–01
  3. By: Casamatta, Georges
    Abstract: We follow the approach of Grochulski (2007), who determines the optimal income tax schedule when individuals have the possibility of avoiding paying taxes. We however modify his setup by considering a convex concealment cost function. This assumption violates the subadditivity property used in Grochulski (2007) and this has strong implications for the design of the tax schedule. This latter indeed shows that, with subadditivity, all individuals should declare their true income. Tax avoidance is thus not optimal. With a convex cost function, we find that a subset of individuals, located in the interior of the income distribution, should be allowed to avoid taxes, provided that the marginal cost of avoiding the first euro is suciently small. We also provide a characterization of the optimal income tax curve.
    Keywords: fiscal avoidance; optimal income tax
    JEL: H21
    Date: 2011–10
  4. By: Taylor, Mark P.
    Abstract: We identify patterns of self-employment entry, exit and survival in a sample of EU countries and examine factors that explain individuals self-employment experiences within and between countries. We estimate a range of models, including dynamic random effects models that endogenise the initial condition. Our results highlight similarities and differences between countries, and illustrate the importance of age and previous labour market experiences in determining self-employment flows. We also find a high degree of persistence in self-employment across countries, which is most pronounced in France and Germany and least pronounced in Spain. Our results suggest that flows into self-employment are positively associated with the strictness of employment protection legislation.
    Date: 2011–10–10

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