nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2014‒08‒25
six papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Indirect Job Creation and the Informal Sector in Mexico By Mariana Pereira-López
  2. Defining and Measuring Informality in the Turkish Labor Market By Acar, Elif Öznur; Tansel, Aysit
  3. A Portrait of Informal Sector Credit and Interest Rates in Malawi: Interpolated Monthly Time Series By Harold Ngalawa
  4. Evidence on book-tax differences and disclosure quality based on the notes to the financial statements By Evers, Maria Theresia; Finke, Katharina; Matenaer, Sebastian; Meier, Ina; Zinn, Benedikt
  5. Determinants of Urban Labour Earnings in Tanzania, 2000/01-06 By Vincent Leyaro; Priscilla Twumasi Baffour; Oliver Morrissey; Trudy Owens
  6. Minería informal aurífera en Colombia. Principales resultados del levantamiento de la línea de base By Edwin A. Goñi Pacchioni; Adriana Sabogal Moreno; Roberto Asmat

  1. By: Mariana Pereira-López (Universidad Iberoamericana, Ciudad de México)
    Abstract: This paper analyzes the effects of localized labor demand shocks in the tradable sector, such as the establishment of a large tradable firm in a municipality, over nontradable formal and informal jobs in the case of Mexico. Results indicate that locations that experienced this shock have between 8 and 13 thousand more jobs than other municipalities over a ten-year period. Indirect job creation is similar in both the formal and the informal sectors, but informality appears to be more vulnerable to negative shocks. Furthermore, the effects of shocks are symmetric in the formal sector but not in the informal, where negative shocks have greater effects over nontradable employment.
    JEL: J23 R11 R12 R23
    Date: 2014–08–20
  2. By: Acar, Elif Öznur (Cankaya University); Tansel, Aysit (Middle East Technical University)
    Abstract: This paper investigates how informality can be defined and measured in the Turkish labor market. Two alternative definitions of informality are used to explore their relevance and implications for the Turkish labor market using descriptive statistics. They are the enterprise definition and the social security definition. Further, contributions of individual and job characteristics to the likelihood of informality are investigated using multivariate probit analysis under the two definitions. The social security registration criterion is found to be a better measure of informality in the Turkish labor market given its ability to capture the key relationships between several individual and employment characteristics and the likelihood of informality. The study suggests that preference should be given to social security definition of labor informality for a more accurate depiction of the Turkish labor market. The suitability of the two alternative definitions of informality in the Turkish labor market and its implications have not been investigated before.
    Keywords: informality, definition, measurement and likelihood, Turkey
    JEL: J20 J21 J24 O17
    Date: 2014–08
  3. By: Harold Ngalawa
    Abstract: Although informal finance forms a large part of their financial sector, nearly all low income countries exclude informal transactions in official monetary data. Usually, informal finance data are nonexistent and occasionally, they are available only from surveys that often occur at irregular intervals and mostly with incomparable data. Using two survey datasets, indigenous knowledge, and elements of Friedman’s data interpolation technique, this study constructs monthly time series of informal credit and interest rates for Malawi. The study argues that datasets constructed in this manner may be used with minimal loss of substance in place of the actual but nonexistent data.
    Keywords: Informal financial sector, low income countries, interpolation
    JEL: Z13 E43 E44 E51
    Date: 2014
  4. By: Evers, Maria Theresia; Finke, Katharina; Matenaer, Sebastian; Meier, Ina; Zinn, Benedikt
    Abstract: The German Accounting Law Modernization Act (BilMoG) represents a change in paradigm with regard to the traditionally close relationship between financial and tax accounting in Germany. At the same time, requirements on the disclosure of deferred taxes were revised considerably. We make use of these new disclosure provi-sions to disaggregate firms' deferred tax position and to analyze the components of temporary book-tax differences that add to the reporting gap in Germany. To this end, we apply a unique dataset of hand-collected information from individual financial statements for the fiscal year 2010. We find considerable differences between financial and tax accounting and observe that temporary book-tax differences are mainly associ-ated with mandatory differences in accounting for provisions. The scope and quality of tax-related disclosures vary substantially and the overall disclosure quality is low. In order to identify the determinants of the heterogeneity of disclosure quality, we con-struct an index for voluntary and mandatory disclosure of deferred tax information and conduct multivariate analyses to explain firms' disclosure decisions. We show that the recognition of deferred tax assets and liabilities on the face of the balance-sheet is sig-nificantly and positively related with disclosure quality in the notes to the financial statements. Further, our results suggest that larger firms are more likely to have high-quality tax disclosures and that high implementation costs could also explain the ob-served shortfalls in disclosure quality. Moreover, we find that different reporting incen-tives might apply if reporting on losses is assessed in isolation. We use these insights to derive implications for the discussion about whether and how to reform disclosure re-quirements under German GAAP. --
    Keywords: book-tax conformity,book-tax differences,deferred taxes,disclosure quality,tax reporting
    JEL: H20 H25 K34 M41
    Date: 2014
  5. By: Vincent Leyaro; Priscilla Twumasi Baffour; Oliver Morrissey; Trudy Owens
    Abstract: This paper presents analysis of urban areas in the Tanzania Integrated Labour Force Survey (ILFS) for 2000/01 and 2006 and the Urban Household Worker Survey (UHWS) for 2004, 2005 and 2006. The main aims are to estimate returns to education and to identify, conditioned on education and labour market experience, earnings differentials by gender and across sectors (public, private and informal). We confirm the general pattern that returns to education are increasing in level and years of education but note differences across sector of employment and the earnings distribution. Public sector workers (who tend to be more educated with longer tenure) and the self-employed with employees (small and micro enterprises) have the highest earnings whereas informal sector (self-employed without employees) and private sector wage earners have similar earnings on average (except for wage earners in large firms who have considerably higher earnings). Post-primary education is important in determining selection into wage employment, especially for the public sector. Allowing for selection, education has no additional effect on public sector wages, returns to education are concave for the self-employed but non-concave for the private wage sector. Quantile regressions reveal differential returns to education across the earnings distribution: primary and secondary education are inequality-reducing (more beneficial to those on lower earnings) whereas tertiary education is inequality-increasing. JEL No.:J6, J62, J69
    Keywords: Labour Earnings, Returns to Education, Urban Labour, Tanzania
  6. By: Edwin A. Goñi Pacchioni; Adriana Sabogal Moreno; Roberto Asmat
    Abstract: En este documento se presentan los principales resultados del levantamiento de línea de base sobre minería informal de oro en cuatro departamentos colombianos (i.e. Antioquia, Bolívar, Chocó y Caldas). Este levantamiento de datos se realizó entre noviembre y diciembre de 2012. La selección de estos departamentos se debe a su importancia dentro de la producción aurífera y al mismo tiempo sus altos niveles de informalidad en la actividad minera. El objetivo de este levantamiento de línea de base es contar con información que permita caracterizar de mejor manera la actividad aurífera informal, conocer la cadena de valor del oro informal, realizar una caracterización socioeconómica del conductor minero, entre otros. Esta línea de base parte del marco muestral de las Unidades de Producción Minera de Oro Informales (UPMOI) del Censo Minero (2010-2011) y busca complementar la información ya existente y servir de base para la elaboración de una estrategia para la formalización minera en el país.
    Keywords: Minería informal, Oro, Línea de base, Unidades de Producción Minera de Oro Informales, Minería y energía
    JEL: L71 E26 L78
    Date: 2014–07–31

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