nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2015‒01‒14
five papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Segmentation and informality in Vietnam: A Survey of Literature By Jean-Pierre Cling; Mireille Razafindrakoto; François Roubaud
  2. Dual labour markets, minimum wage, inequalities By Piotr Lewandowski; Agnieszka Kamiñska; Karol Pogorzelski
  3. Job Quality in Segmented Labor Markets: The Israeli Case By Neuman, Shoshana
  4. On the Relative Size of Direct and Indirect Taxation By Soldatos, Gerasimos T.

  1. By: Jean-Pierre Cling (CEPN, Université Paris Nord-CNRS, PSL, Université Paris-Dauphine, LEDa, IRD UMR DIAL); Mireille Razafindrakoto (IRD, UMR DIAL, PSL, Université Paris-Dauphine); François Roubaud (IRD, UMR DIAL, PSL, Université Paris-Dauphine)
    Abstract: (english) Labour market segmentation is usually defined as the division of the labour markets into separate submarkets or segments, distinguished by different characteristics and behavioural rules (incomes, contracts, etc.). The economic debate on the segmentation issue has been focusing in developed countries, and especially in Europe, on contractual segmentation and dualism. However, in developing countries such as Vietnam which is the focus of this study, wage work is marginal and the approach to labour market segmentation is necessarily slightly different. Indeed, most workers are engaged in the informal economy and many of them are self-employed in their own household business. Starting with an analysis of the main characteristics of the national labour market, this paper presents a survey of the literature on informality and labour market segmentation in Vietnam (section 2). Section 3 describes the institutional background related to firm registration and social protection in Vietnam, and analyses the reasons for informality in relationship with the institutional framework. Section 4 describes the reforms being put in place and employment strategies related to the informal economy. Policy recommendations are proposed in the last section. _________________________________ (français) La segmentation sur le marché du travail est usuellement définie comme la coexistence de deux segments ou secteurs qui se distinguent par leurs caractéristiques et les comportements qui y prévalent (niveau de revenus, contrats, etc.). Le débat économique sur la segmentation s’est focalisé dans les pays développés, et en particulier en Europe, sur le dualisme résultant des contrats. Cependant, dans les pays en développement comme le Vietnam, les emplois salariés étant marginaux, la segmentation sur le marché du travail doit nécessairement être appréhendée de manière différente. La majorité des emplois relève de l’économie informelle et une grande partie est constituée d’auto-emploi dans des entreprises individuelles. Partant d’une analyse des principales caractéristiques du marché du travail national, ce document présente ensuite une revue de la littérature sur l’informalité et la segmentation sur le marché du travail au Vietnam (section 2). La section 3 décrit le cadre institutionnel en matière d’enregistrement et de protection sociale au Vietnam, et analyse les raisons de l’informalité. La section 4 examine les réformes qui ont été mises en place et les stratégies en termes d’emploi touchant l’économie informelle. Enfin, des recommandations politiques sont proposées dans la dernière section.
    Keywords: Informality, Labour market, segmentation, Vietnam, Informel, marché du travail.
    JEL: J24 J31 O53 O17
    Date: 2014–11
  2. By: Piotr Lewandowski; Agnieszka Kamiñska; Karol Pogorzelski
    Abstract: This brief is a summary of the „2014 Conference on dual labour markets, minimum wage and inequalities” which took place in Warsaw. It briefly discusses the main causes of labour market duality in the developed countries, consequences of duality and some of the policy implications drawn in the discussions and speeches during the conference.
    Keywords: labour market duality, minimum wage, inequalities
    JEL: J38 J7
    Date: 2014–10
  3. By: Neuman, Shoshana (Bar-Ilan University)
    Abstract: Till the early-1990s the collectively-bargained labor contract (between the trade-union that presented the employees, and the employer or the employers'-association) was the norm, granting salaried workers a stable and protected labor contract. Thereafter, and more significantly after 1995, the share of unionized workers dropped constantly, to almost half of its peak level (of more than 80 percent). In parallel, two other types of contracts became more common: personal temporary contracts (between an individual worker and his employer), and contracts between a labor-contractor and employees who are employed in a triangular mode of employment (employee-contractor-client). The latter involves precarious employment and is more common among the more vulnerable sub-populations of new-immigrants, disabled individuals, Israeli-Arabs, foreign-workers and women. The contractual changes resulted in work instability, growth of the secondary labor market and segmentation. Efforts to protect the disadvantaged secondary labor-market workers include legislation, reforms, new regulations, and enforcement of all the above.
    Keywords: Israel, labor market segmentation, labor contracts, collective bargaining, contracted labor, immigrants, foreign workers, regulation
    JEL: J15 J21 J31 J41 J51 J58 J61 J81
    Date: 2014–12
  4. By: Soldatos, Gerasimos T.
    Abstract: Modifying the standard analytical apparatuses for direct and indirect tax evasion to incorporate forward indirect tax shift in a monopolistically competitive environment, this paper maintains that indirect tax evasion would exceed for sure direct tax evasion only under consumer risk neutrality and a tax policy zeroing the tax shift. Also, in the presence of tax evasion, there cannot be optimal direct-indirect tax mix, because tax evasion is accompanied by uncertainty and hence, nonlinearities in the tax schedules that cannot be dealt with at least practically.
    Keywords: Direct and indirect tax evasion, Forward indirect tax shift, Consumer risk neutrality
    JEL: H22 H24 H25 H26
    Date: 2014
  5. By: Ivan Raoniæ, Zoran Vasic (College of Economics and Administration, Belgrade; Republic of Serbia, Ministry of Finance, Tax Administration.)
    Abstract: Like any tax, the VAT is vulnerable to evasion and fraud. It should be said that its concept of credit - refund offers the unique possibility of abuse, which has for a long time the main concern in the European Union (EU), while in Serbia profiled specific form of VAT evasion, so called “ Business with phantom companies “. This paper describes the basic types of tax violations characteristic of VAT, considers how to solve them, based on the experiences of development countries, with a special focus on the specific concept to VAT in Serbia.
    Keywords: enterprise, allocation, realokatori, yield, expenses, recession, capital.
    JEL: H20 H25 H26
    Date: 2014–09

This nep-iue issue is ©2015 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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.