nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2019‒09‒02
four papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. The effectiveness of interventions to reduce informality in low- and middle income countries By Jessen, Jonas; Kluve, Jochen
  2. Community-Based Health Insurance (CBHI): The Perils of Reaching Out to the Informal Economy By Boris Verbrugge; Adeline Ajuaye; Jan Van Ongevalle
  3. CONTRIBUTORY SOCIAL PROTECTION FOR THE INFORMAL ECONOMY? Insights from Community-Based Health Insurance (CBHI) in Senegal and Tanzania By Boris Verbrugge; Adeline Ajuaye; Jan Van Ongevalle
  4. Impôts et pratiques fiscales : interroger la signification et les usages de la formalité By Owen, Oliver

  1. By: Jessen, Jonas; Kluve, Jochen
    Abstract: Labor markets in low- and middle income countries are characterized by high levels of informality. A multitude of interventions have therefore been implemented in many countries with the objective to increase the formalization of firms and workers, including information campaigns, simplification of registration procedures, reductions of payroll taxes and social security contributions, and interventions that enforce labor or business formalization. In this paper, we compile a database of 157 impact estimates from 32 academic studies that evaluate empirically one or more of these formalization interventions. The empirical analysis correlates the impact estimates of the primary studies - given as either (i) a measure of sign and statistical significance or (ii) the effect size - with explanatory factors such as the intervention type, the outcome variable, the scope of the intervention (program or policy), and other covariates. Several key findings emerge: first, the intervention type is not a strong determinant for the effectiveness of formalization interventions, though tax incentives and labor inspection are most likely to display significant positive effects. Second, the outcome "worker registration" shows significantly better results than other outcomes. Third, interventions at scale - i.e. formalization "policies" - are more effective on average than singular "programs".
    Keywords: formalization,labor registration,business registration,impact evaluation
    JEL: C40 J08 J48
    Date: 2019
  2. By: Boris Verbrugge (HIVA, KU Leuven); Adeline Ajuaye (HIVA, KU Leuven); Jan Van Ongevalle (HIVA, KU Leuven)
    Date: 2018–12
  3. By: Boris Verbrugge (HIVA, KU Leuven); Adeline Ajuaye (HIVA, KU Leuven); Jan Van Ongevalle (HIVA, KU Leuven)
    Abstract: Social protection occupies an important place on the international agenda. A growing number of low- and middle-income countries are in the midst of a ‘quiet revolution’, whereby they are integrating social protection into national development strategies (Barrientos & Hulme, 2009). This evolution is supported by international institutions like the World Bank and the ILO, who, in 2015, launched a global partnership for universal social protection (Zelenev, 2015). Yet in many of these countries, the achievement of universal social protection remains a massive challenge. According to the ILO (2017), only 29 percent of the global population enjoys access to comprehensive social protection, while the remaining 71 percent are not or only partially covered. In addition to being underfinanced and fragmented, existing systems of social protection continue to focus on those in formal employment, while excluding the majority that depends on the informal economy (Alfers et al., 2017). This coverage gap is highly worrisome, because people in the informal economy are disproportionately at risk from employment-related health- and income shocks (Chen, 2008)...
    Date: 2018–12
  4. By: Owen, Oliver
    Abstract: En appelant à étudier les politiques de taxation en Afrique, qui participent de la distinction entre formel et informel, ce dossier vise à saisir les perspectives nouvelles ouvertes par des travaux de recherche récents, tant sur la fiscalité elle-même que sur la nature et le fonctionnement des États africains. Nombre de gouvernements africains, prenant acte de l’imprévisibilité croissante des prix des ressources naturelles sur les marchés mondiaux ainsi que de l’incertitude de l’aide internationale, se sont récemment concentrés sur la réforme de leur fiscalité. Cette volonté de maximiser les recettes publiques a été fortement soutenue par de nombreux bailleurs internationaux qui y ont vu l’opportunité d’effectuer une transition dans les formes d’aides apportées, en passant des transferts monétaires à long terme à un soutien plus réduit pour un autofinancement.
    Keywords: Economic Development, Finance, Governance,
    Date: 2018

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