nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2021‒10‒25
ten papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. The afterlife of industrial work: Urban-to-rural labour transitions from the factory to the informal economy By Alessandra Mezzadri; Kaustav Banerjee
  2. Determinants, Wage Inequality, and Occupational Risk Exposure of Informal Workers: A Comprehensive Analysis With the Case Study of Thailand By Upalat Korwatanasakul
  3. Revisiting the informal aspects of the activity of countries, studied through Social Accounting and Socio-Demographic Matrices, with an application to Mozambique. By Susana Santos; Mónica Magaua
  4. Gender and vulnerable employment in the developing world: Evidence from global microdata By Maria C. Lo Bue; Tu Thi Ngoc Le; Manuel Santos Silva; Kunal Sen
  5. The informal sector and the safety of female traders in Tanzania: A reflection of practices, policies, and legislation By William Amos Pallangyo
  6. Improving young women's working conditions in Tanzania's urban food vending sector By Nandera Ernest Mhando; Nasibu Rajabu Mramba
  7. Hidden wealth By Cummins, Neil
  8. An Examination of Taxpayers Attitude towards Income Tax: A Case of Bangladesh By Md. Shahbub Alam
  9. The effects of a risk-based approach to tax examinations: Evidence from Tanzania By Amina Ebrahim; Elineema Kisanga; Ezekiel Swema; Vincent Leyaro; Edwin P. Mhede; Ephraim Mdee; Heikki Palviainen; Jukka Pirttilä
  10. L'Europe des paradis fiscaux By Jacques Fontanel

  1. By: Alessandra Mezzadri; Kaustav Banerjee
    Abstract: The COVID-19 pandemic has escalated processes of labour transition from industrial work to the informal economy, which have always characterized the life of the working poor. Exploring urban-to-rural labour transitions through a feminist political economy lens and adopting a life-cycle approach to labour and social reproduction, this paper analyses the post-industrial livelihoods and experiences of former Indian garment workers leaving the National Capital Region and moving back to Bihar.
    Keywords: Feminist economics, Political economy, Social reproduction, Informal sector, Labour dynamics, Livelihoods, Life cycle
    Date: 2021
  2. By: Upalat Korwatanasakul
    Abstract: This study provides a comprehensive analysis of informal workers in Thailand by utilising the 2006-2019 Thai Informal Employment Survey data. The estimated results reveal the adverse effects of informal employment on workers’ economic and social conditions as follows: 1) the wages gap working against informal employment, confirming that informal employment is not a choice but rather an unavoidable constraint (Oaxaca-Blinder decomposition), 2) a negative relationship between informal employment and wages, particularly among workers in the lowest tail of the wage distribution (quantile regression), and 3) a positive association between informal employment and occupational risks, particularly injury with high severity (logit and probit models). Therefore, policies to smooth informal workers’ mobility to the formal sector is crucial. Furthermore, the analyses manifest the importance of schooling in reducing the tendency to work in the informal sector, narrowing the wages gap, and lowering occupational risks and injury severity. However, the estimated results from the pseudo-panel fixed effects regression show no relationship between schooling and informal workers’ wages but a positive relationship between their wages and working experience. Thus, policymakers may adopt schooling-related policies to improve informal workers’ welfares and mobility to the formal sector. On the other hand, to help workers who inevitably remain in the informal sector, the government may resort to policies regarding working experience, e.g. on-the-job training programmes, to help informal workers earn more wages and, in turn, become less vulnerable.
    Keywords: Informal Worker; Occupational Risk; Sectoral Transition; Thailand; Wage Inequality
    JEL: J16 J21 J31 J71 O17
    Date: 2021–09
  3. By: Susana Santos; Mónica Magaua
    Abstract: Approaches based on Social Accounting Matrices (SAMs) and Socio-Demographic Matrices (SDMs) will be presented as a way of capturing relevant networks of linkages and the corresponding multiplier effects, which can subsequently be used for modelling the activity of the countries to be studied. Emphasis will be placed on the activity of household unincorporated enterprises that will be identified with the informal sector. Based on methodological principles derived mainly from the works of Richard Stone, a proposal will be made to study the economic activity of Mozambique in 2016 in a matrix format, with special attention to the informal sector in general and, within this, forestry, and logging. Such a proposal includes, on the one hand, people – represented by a SDM – and, on the other hand, activities, products, factors of production and institutions – represented by a SAM. The exposition will mostly be accompanied by an application to the above-mentioned reality. Scenarios, involving changes in functional and institutional distribution of income, will be presented and the macroeconomic effects of these changes, will be summarised in the form of changes in the macroeconomic aggregates, such as, Gross Domestic Product, Gross National Income and Disposable Income.
    Keywords: Social Accounting Matrix; Socio-Demographic Matrices; Informal Economy.
    JEL: E01 E16 J11
    Date: 2021–10
  4. By: Maria C. Lo Bue; Tu Thi Ngoc Le; Manuel Santos Silva; Kunal Sen
    Abstract: This paper investigates gender inequality in vulnerable employment: forms of employment typically featuring high precariousness, inadequate earnings, and lack of decent working conditions. Using a large collection of harmonized household surveys from developing countries, we measure long-term trends, describe geographical patterns, and estimate correlates of gender inequalities in vulnerable employment. Conditional on individual and household characteristics, women are 7 percentage points more likely to be in vulnerable employment than men.
    Keywords: Vulnerable employment, Gender gap, Developing countries
    Date: 2021
  5. By: William Amos Pallangyo
    Abstract: This paper assesses the participation of female traders, safety factors, and existing policies and legislation in the informal sector in Tanzania. Primary data were obtained from 11 in-depth interviews, 10 focused group discussions, and 236 structured questionnaires. The primary data were triangulated with secondary information from various reports, national policies, and relevant legislation. It was noted that female traders participate in various informal trades, including stone quarrying, selling accessories and ornaments, food vending, and cloth and garment making.
    Keywords: Informal sector, female entrepreneurship, Tanzania, Women's work, Working conditions, Informal work
    Date: 2021
  6. By: Nandera Ernest Mhando; Nasibu Rajabu Mramba
    Abstract: In this paper, we investigate the working conditions of the young women working as assistants in the food vending sector in Tanzania using interviews and focus group discussions which are supplemented with quantitative survey. Data were collected in the municipalities of Nyamagana and Ilemela in Mwanza Region, Northern Tanzania, and from officers working with the government and insurance fund organizations in Dodoma region, central Tanzania, from August to September 2020.
    Keywords: Tanzania, Working conditions, Food retailing, Women's work, Informal sector, Youth, Informal work
    Date: 2021
  7. By: Cummins, Neil
    Abstract: Sharp declines in wealth-concentration occurred across Europe and the US during the 20th century. But this stylized fact is based on declared wealth. It is possible that today the richest are not less rich but rather that they are hiding much of their wealth. This paper proposes a method to measure this hidden wealth, in any form. In England, 1920-1992, elites are concealing 20-32% of their wealth. Among dynasties, hidden wealth, independent of declared wealth, predicts appearance in the Offshore Leaks Database of 2013-6, house values in 1999, and Oxbridge attendance, 1990-2016. Accounting for hidden wealth eliminates one-third of the observed decline of top 10% wealth-share over the past century
    Keywords: hidden wealth; inequality; economic history; big data; tax evasion
    JEL: N00 N33 N34 D31 H26
    Date: 2019–12
  8. By: Md. Shahbub Alam (Dept. of Accounting and Information Systems, Islamic University, Bangladesh. Author-2-Name: Author-2-Workplace-Name: Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: " Objective - Taxation is the government's primary source of revenue, but it is unable to raise this revenue from the general public. The major goals of this article are to determine the taxpayers' attitudes toward income tax in Bangladesh, as well as the factors influencing taxpayers' behavioral intentions regarding tax evasion and avoidance. Both qualitative and quantitative research methods were used in this study. Methodology/Technique - The respondents' primary data was acquired by a standardized written questionnaire and a face-to-face viva. To complete the job, the study used purposeful random sampling, which resulted in the selection of 150 individuals from various occupations. After gathering data, it was examined using several statistical methods. Findings - The study's findings reveal a significant negative relationship between taxpayer attitudes regarding tax evasion and tax compliance behavior, as well as the fact that taxpayer attitudes and conduct differ by occupation, resulting in diverse tax evasion and avoidance trends. Novelty - This study will aid the government authority and the National Bureau of Revenue in monitoring taxpayer attitudes and improving tax collection by reducing taxpayers' negative attitudes toward taxes and getting more people to file tax returns. Type of Paper - Empirical."
    Keywords: Taxpayers; Attitude; Income tax; Bangladesh.
    JEL: H21 H24 H26
    Date: 2021–09–30
  9. By: Amina Ebrahim; Elineema Kisanga; Ezekiel Swema; Vincent Leyaro; Edwin P. Mhede; Ephraim Mdee; Heikki Palviainen; Jukka Pirttilä
    Abstract: While technical assistance and increased use of ICT in the area of tax administration have been regarded to hold considerable promise for greater revenue collection, the evidence on how these activities work in the real-world circumstances of developing countries is scant. The paper attempts to fill this gap by evaluating an intervention undertaken jointly by the Finnish and Tanzanian revenue administrations. In this pilot programme, a risk-based method for enhancing firm tax examinations in Tanzania was developed.
    Keywords: Risk-based approach, Tax compliance, Tanzania, Tax administration, Domestic revenue mobilization, Administrative data, Taxable income
    Date: 2021
  10. By: Jacques Fontanel (CESICE - Centre d'études sur la sécurité internationale et les coopérations européennes - UPMF - Université Pierre Mendès France - Grenoble 2 - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble)
    Abstract: In a world of heterogeneous national interests, it is difficult to deal with tax optimization and tax avoidance without solidarity between states. The European Union is made up of member states with often divergent interests and less than exemplary behaviour. In 2017, Luxembourg, Switzerland, the Cayman Islands, the City of London, Ireland, Belgium and the Netherlands were considered among the 15 tax havens of the world by NGOs, while the European Commission had not retained any EU member in the 30 countries it had so qualified. It is undeniable, however, that the basis for the economic development of Switzerland, Ireland or Luxembourg has been the consequence of the very favourable tax conditions granted to foreign companies and the withholding of information in the banking sector. Most multinational companies use tax havens to optimize their profits. The tax war has not been declared yet, but it is threatening. Several actions have been taken in the last few years to reduce the disparities in taxation, banking secrecy and financial opacity. A significant European tax would reduce these injustices and restore democracy.
    Abstract: Dans un monde d'intérêts nationaux hétérogènes, il est difficile de faire face à l'optimisation et à l'évitement fiscal sans solidarité entre les Etats. L'Union européenne est constituée d'Etats membres aux intérêts souvent divergents et aux comportements peu exemplaires. En 2017, le Luxembourg, la Suisse, les îles Caïmans, la City de Londres, l'Irlande, la Belgique et les Pays-Bas étaient considérés parmi les 15 paradis fiscaux du monde par les ONG, alors que la Commission européenne n'avait retenu aucun membre de l'UE dans les 30 pays qu'elle avait ainsi qualifiées. Il est pourtant indéniable que la base du développement économique de la Suisse, de l'Irlande ou du Luxembourg a été la conséquence des conditions fiscales très favorables accordées aux entreprises étrangères et à la rétention d'information dans le secteur bancaire. La plupart des firmes multinationales utilisent les paradis fiscaux pour optimiser leurs bénéfices. La guerre fiscale n'a pas encore été déclarée, mais elle menace. Plusieurs actions ont été entreprises durant ces dernières années pour réduire ces disparités d'imposition, le secret bancaire, l'opacité financière. Un impôt européen significatif permettrait de réduire ces injustices et de restaurer la démocratie
    Keywords: Europe,European Union,Tax evasion game,tax optimization,Union européenne,Evasion fiscale,Optimisation fiscale
    Date: 2021

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