nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2017‒09‒10
six papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. City Size, Distance and Formal Employment Creation By O´Clery, Neave; Lora, Eduardo
  2. Housing Subsidies, Labor Supply and Household Welfare. Experimental Evidence from Argentina By Alzúa, María Laura; Amendolaggine, Julián; Cruces, Guillermo; Greppi, Catrihel
  3. Grey Zones and the Reconfiguration of Employability Policies for Youth: the Case of Poor Districts in Morocco By Youssef Sadik
  4. The Latent Heterogeneity of the Wage Structure and Gender Wage Gap: Dual economy analysis revisited (Japanese) By YAMAGUCHI Kazuo
  5. You’ve got mail: A randomised Field experiment on tax evasion. By Bott, Kristina Maria; Cappelen, Alexander W.; Sørensen, Erik Ø.; Tungodden, Bertil
  6. Improving financial access in Africa: insights from information sharing and financial sector development By Simplice Asongu

  1. By: O´Clery, Neave; Lora, Eduardo
    Abstract: Cities thrive through the diversity of their occupants because the availability of complementary skills enables firms in the formal sector to grow, delivering increasingly sophisticated products and services. The appearance of new industries is path dependent in that new economic activities build on existing strengths, leading cities to both diversify and specialize in distinct areas. Hence, the location of necessary capabilities, and in particular the distance between firms and people with the skills they need, is key to the success of urban agglomerations. Using data for Colombia, this paper assesses the extent to which cities benefit from skills and capabilities available in their surrounding catchment areas. Without assuming a priori a definition for cities, we sequentially agglomerate the 96 urban municipalities larger than 50,000 people based on commuting time. We show that a level of agglomeration equivalent to between 45 and 75 minutes of commuting time, corresponding to between 62 and 43 cities, maximizes the impact that the availability of skills has on the ability of agglomerations to generate formal employment. Smaller urban municipalities stand to gain more in the process of agglomeration. A range of policy implications are discussed.
    Keywords: Ciudades, Educación, Investigación socioeconómica, Sector privado, Trabajo y protección social,
    Date: 2016
  2. By: Alzúa, María Laura; Amendolaggine, Julián; Cruces, Guillermo; Greppi, Catrihel
    Abstract: We study the impact of a social housing policy program implemented in Argentina, exploiting the random assignment rule to identify the policy's causal effect on labor market and other socio-economic outcomes. In particular, this paper evaluates an intervention that combines access to quality housing at a heavily subsidized cost, the granting of property rights, and relocation in a suburb of Rosario, Argentina's third largest city. In a preliminary analysis, based on administrative social security records, we find that the policy generates a reduction in registered employment by more than 7 percentage points, especially for women and beneficiaries over 50 years of age. We went further and conducted a purposely-designed household survey among a sample of beneficiaries in order to understand the underlying mechanisms and welfare implications of these results. All in all, our analysis points to the existence of an income effect and confirms the registered fall in formal employment and labor force participation. We do not find an increase in informalization, although beneficiaries' perceived access to local job opportunities are signicantly reduced.
    Keywords: Economía, Investigación socioeconómica, Trabajo y protección social, Vivienda,
    Date: 2016
  3. By: Youssef Sadik (Université Mohammed V, Rabat)
    Abstract: Public employment policies for youth have focused on higher level graduates unemployment that constitutes the main concern since the late 1980s, leaving aside other categories of young people, which has led to a broad movement of decomposition-recomposition of the supply-demand jobs. Hence the meteoricrise of new forms of work, called "gray areas", usually at the frontiers of conventional categories of "formal / informal", "precarious / stable", "public / private" etc. The Moroccan government has implemented a number of strategies and actions to support this transformation. Nevertheless, these policies suffer from the dispersion and lack of coordination between the various public and private stakeholders. In this article we propose to study the case of a poor district in Rabat-Sale region).
    Abstract: Au Maroc, les politiques publiques d’emploi en faveur des jeunes se sont focalisées sur le chômage des diplômés de niveau supérieur qui constitue la principale préoccupation depuis la fin des années 1980, laissant de côté les autres catégories de jeunes, ce qui a entrainé un large mouvement de décomposition-recomposition de l’offre-demande d’emploi, ce qui entraine la montée de nouvelles formes de travail appelées « zones grises » et qui se situe aux frontières des catégories dualistes classiques « formel/informel », « précaire/stable », « public/privé », etc. Bien que L’État ait mis en place un certain nombre de dispositifs pour accompagner ces transformations. Force est de constater que ces politiques publiques d’emploi souffrent de la dispersion et du manque de coordination entre les intervenants publics et privés. Dans le présent article, nous présentons les résultats de l’étude de terrain que nous avons menée au sein d’un quartier défavorisé dans la région de Rabat-Salé, ensuite nous analysons, sur la base des travaux récents sur les zones grises d’emploi, les dynamiques du marché d’emploi local et ses recompositions.
    Keywords: Morocco,employability,gray area of employment,employment,unemployment,Rabat-Salé,employabilité,emploi,chômage,zone grise d'emploi,Maroc
    Date: 2017
  4. By: YAMAGUCHI Kazuo
    Abstract: "Dual economy theory," and more generally theory and research on the relationship between segmented labor markets and economic inequality, has historically been treated as deviant in the study of labor economics. This paper shows that part of the problem lies in the analytical method and measurement of central concepts, and provides a remedy to this problem while progressing the research pioneered by Ishikawa and Dejima (1994) on the analysis of the dual economy in Japan. Labor markets in Japan can be interpreted as a probabilistic mixture of three elementary forms, each having a distinct wage structure. The most significant factor affecting the allocation of people to distinct labor markets is the distinction between regular and irregular employees. Firm size, industry, and schooling also have a strong effect on allocation. Gender has no direct effect on allocation. One labor market comprising around 35% of employees is characterized by high average wage, 99% regular employment, and a greater representation of college graduates and employees of firms with 300 or more employees. It also has a larger wage return to human capital and less gender wage gap than average. However, it is also the labor market where gender inequality in the length of tenure is greatest. The second and largest labor market comprising around 60% of employees is characterized by relatively low average wage, 61% regular employment, and a larger representation by high school and junior college graduates and employees of medium-sized firms with 30-299 employees. This is the labor market where the gender wage gap is greatest and there is a large gender inequality in the rate of wage return to tenure.These first two labor markets have a greater gender wage gap at the time of employment among people with children compared to those without. The third labor market comprising only 5.5% of employees is characterized by 27% regular employment and an overrepresentation by middle-school graduates and employees of small firms with less than 30 employees. The labor market has the lowest average wage and employees have uniformly low wages except for managers and a small proportion of regular workers. No direct gender effect on wage exists in this labor market. However, a larger representation of women, particularly those with children, exists due to the larger proportion of irregular workers among women. These results indicate that a larger allocation of women in the two peripheral labor markets is an epiphenomenon caused by the exclusion of irregular workers from the core labor market, and do not support Doeringer and Piore's (1971) argument on the relative exclusion of minority workers from the core labor market. In Japan, gender wage gap is generated mainly within the core and peripheral labor markets, and only indirectly between the labor markets due to the larger representation of irregular workers among women. These results demonstrate the theoretical merit of considering the latent heterogeneity of wage structure in labor markets.
    Date: 2017–09
  5. By: Bott, Kristina Maria (Dept. of Economics, Norwegian School of Economics and Business Administration); Cappelen, Alexander W. (Dept. of Economics, Norwegian School of Economics and Business Administration); Sørensen, Erik Ø. (Dept. of Economics, Norwegian School of Economics and Business Administration); Tungodden, Bertil (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: We report from a large-scale randomized field experiment conducted on a unique sample of more than 15 000 taxpayers in Norway, who were likely to have misreported their foreign income. We find that the inclusion of a moral appeal or a sentence that increases the perceived probability of detection in a letter from the tax authorities almost doubled the average self-reported foreign income. The moral letter mainly works on the intensive margin, while the detection letter mainly works on the extensive margin. We also show that the detection letter has large long-term effects on tax compliance.
    Keywords: Taxation; tax evasion; field Experiment.
    JEL: C93 D63 H26
    Date: 2017–06–11
  6. By: Simplice Asongu (Yaoundé/Cameroun)
    Abstract: The study investigates interactions between information sharing offices, the coexistence of financial sub-systems and financial access. The empirical evidence is based on Quantile regressions in order to articulate countries with low, intermediate and high levels of financial access. The scope of the study is on 53 African countries for the period 2004-2011. The following main results are established. First, the positive association between “information sharing offices (ISOs)” and “formal financial sector development” consistently increases with improvements in initial levels of credit access. Second, the negative linkage between ISOs and “informal financial sector development” consistently decreases with increasing levels of credit access. In summary, we establish that the positive complementarity of ISOs and financial formalization is an increasing function of financial activity (or access to credit) whereas the negative complementarity of ISOs and financial informalization is a decreasing function of financial activity.
    Keywords: Information Asymmetry; Financialization; Financial Access
    JEL: G20 G29 L96 O40 O55
    Date: 2017–07

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