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on Informal and Underground Economics |
| By: | Lea Cassar |
| Abstract: | We use data from a unique, nationally representative survey to investigate the relationship between job satisfaction and employment characteristics in Chile. Consistent with the dualistic models, job protection appears to be a positive determinant of job satisfaction rather than a cost to be avoided by engaging in informal activities. Further, we find self-employed workers to be penalized by the lack of valuable workplace facilities, such as decent toilets and clean water. However, being self-employed does not necessarily mean taking the ‘bad’ jobs. We show that self-employed workers in Chile, like their counterparts in industrialized countries, derive procedural utility from being independent. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:qeh:ophiwp:ophiwp041&r=iue |
| By: | Bardey, David; Jaramillo, Fernando |
| Abstract: | We analyze whether the introduction of unemployment insurance (UI hereafter) benefits in developing countries would reduce the effort made by unemployed to secure a new job in the formal sector. We show that one shot UI benefits unambiguously increase the effort to secure a new job in the formal sector. The relative strength of income/substitution effects only determine how leisure and informal activities are affected. Consequently, our (partial equilibrium) analysis reveals that short term UI benefits in developing countries do not reduce incentives to secure a new formal job and therefore cannot be interpreted as a subsidy to the informal sector. |
| Keywords: | Unemployment insurance, informal sector, income effects, developing countries. |
| JEL: | H55 I38 J65 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:25103&r=iue |
| By: | Massenot, Baptiste; Straub, Stéphane |
| Abstract: | A standard view holds that removing barriers to entry and improving judicial enforcement would reduce informality and boost investment and growth. We show, however, that this conclusion may not hold in countries with a concentrated bank- ing sector or with low financial openness. When the formal sector becomes larger in those countries, more entrepreneurs become creditworthy and the higher pres- sure in the credit market increases the interest rate. This reduces future capital accumulation. We show some empirical evidence consistent with these predictions. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:24946&r=iue |
| By: | Adam, Antonis; Kammas, Pantelis |
| Abstract: | Using a simple model of income redistribution, we show that the government may use tax evasion as a way to redistribute income from the non- evaders to evaders. This will result then to a negative association between income inequality and per capita transfers and inefficiently high taxes. |
| Keywords: | redistribution; inequality; tax evasion |
| JEL: | H10 H23 H26 |
| Date: | 2011–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34803&r=iue |
| By: | Prof. Dr. Bidyadhar Behera (Social science researcher, Senior faculty member, Commerce in P.N., Autonomous College, Khurdha, Odisha ,India) |
| Abstract: | Entrepreneurial development and management has come to be recognized as the key to rapid and sustainable economic development as well as the welfare and progress of the mankind. Traditionally, the informal sector units including micro and small enterprises(MSEs) attract a very small portion of the banks’ portfolio. Banks along with other institutions, by and large, responsible for providing finance are more accustomed to dealing with more confident, literate borrowers of urban areas. Given this scenario, micro finance(MF) as a means of alleviating poverty has gained momentum in the last couple of decades across India vis-à-vis Odisha, a province fraught with the twin problems of poverty and unemployment. At the same time, MSEs contribute significantly to economic growth, social stability and equity. Assuming lot of significance for a Mao-infested Province like Odisha, these informal sector units operate under the conditions of extreme resource crunch. Besides, their qualitative and quantitative limitations due to outdated technologies result in a low level of productivity and extremely high cost |
| Keywords: | Micro and Small Enterprise (MSE), Self Help Group (SHG), Sustainable Livelihood (SL), Joint Liability Group (JLG) |
| JEL: | M0 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:cms:1asb11:2011-005-082&r=iue |
| By: | Nicola Brandt; Rodrigo Paillacar |
| Abstract: | With slow growth and high inequality Mexico needs investments in infrastructure, education and social policies. Mexico has increased spending in all of these areas. This was easily financed thanks to fiscal reforms in 2007 and 2009 as well as high oil prices in recent years. Oil revenues, which account for around one third of budgetary receipts, are highly volatile, especially due to price movements, and the prospects for production are uncertain, even though less so than in previous years. Mexico has the lowest tax revenues as a share of GDP in the OECD and much of Latin America, even when oil-related revenues are included. The government should improve the efficiency of its public spending. Mexico spends significant sums on energy subsidies, which are in large part captured by higher-income groups. Moreover, these subsidies are not in line with Mexico’s ambitious goals to reduce greenhouse gas (GHG) emissions. These subsidies should be gradually withdrawn in line with the government’s goals. Extending cash benefits to the poor instead would be much more efficient to fight poverty and help citizens and the economy as a whole to buffer income shocks. Agricultural spending should be re-structured to finance more investment in public goods and less support for producers, which has proven ineffective in increasing agricultural productivity. Broadening the tax base by withdrawing some of the most distortive tax expenditures would make an important contribution to strengthen revenues. This would also help make the tax system simpler, thus reducing compliance costs as well as opportunities for tax avoidance and evasion. Efforts to enhance tax enforcement should continue.<P>Une réforme des finances publiques pour une économie mexicaine plus forte, plus juste et plus saine<BR>With slow growth and high inequality Mexico needs investments in infrastructure, education and social policies. Mexico has increased spending in all of these areas. This was easily financed thanks to fiscal reforms in 2007 and 2009 as well as high oil prices in recent years. Oil revenues, which account for around one third of budgetary receipts, are highly volatile, especially due to price movements, and the prospects for production are uncertain, even though less so than in previous years. Mexico has the lowest tax revenues as a share of GDP in the OECD and much of Latin America, even when oil-related revenues are included. The government should improve the efficiency of its public spending. Mexico spends significant sums on energy subsidies, which are in large part captured by higher-income groups. Moreover, these subsidies are not in line with Mexico’s ambitious goals to reduce greenhouse gas (GHG) emissions. These subsidies should be gradually withdrawn in line with the government’s goals. Extending cash benefits to the poor instead would be much more efficient to fight poverty and help citizens and the economy as a whole to buffer income shocks. Agricultural spending should be re-structured to finance more investment in public goods and less support for producers, which has proven ineffective in increasing agricultural productivity. Broadening the tax base by withdrawing some of the most distortive tax expenditures would make an important contribution to strengthen revenues. This would also help make the tax system simpler, thus reducing compliance costs as well as opportunities for tax avoidance and evasion. Efforts to enhance tax enforcement should continue. |
| Keywords: | taxation, public spending, energy subsidies, fiscalité, dépenses publiques, subvention énergétiques |
| JEL: | H3 H4 H7 |
| Date: | 2011–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:904-en&r=iue |
| By: | Clara Delavallade (SALDRU, School of Economics, University of Cape Town) |
| Abstract: | We estimate the effect of the child support grant on mothers' labour supply in South Africa. Identification is based on the use of specific samples, such as black mothers, aged 20 to 45, whose youngest child is aged within 2 years of the age eligibility cut-off, and unanticipated variation over the years in the age eligibility cut-off. Balancing tests across the age cut-o s are used to show that there are no signi cant di erences between mothers of eligible and ineligible children in the samples used, over the years. Different techniques are used to estimate the effect of the child support grant from many angles, including simple OLS as a bench mark, a difference in difference estimator, using appropriately constructed treatment and control groups, instrumental variables estimates, and descriptive analysis. The effect of having an age eligible child is large. Mothers who become recipients in their twenties see an average increase in employment probability of 15%, and in labour force participation of 9%. Many robustness and specification checks are used, including placebo regressions in the pre-treatment years, to ensure the estimated effect is not due to age or another variable. |
| Keywords: | Supply of Corruption, Administrative Corruption, State Capture, Tax Evasion, Competitiveness, North Africa |
| JEL: | C2 D73 O17 H32 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:68&r=iue |