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on Informal and Underground Economics |
| By: | Bernardus Van Doornik (Banco Central do Brasil); David Schoenherr (Princeton University); Janis Skrastins (Washington University in St. Louis) |
| Abstract: | Exploiting an unemployment insurance (UI) reform in Brazil, we study incentive effects of UI in the presence of informal labor markets. We find that eligibility for UI benefits increases formal layoffs by twelve percent. Most of the additional formal layoffs are related to workers transitioning to informal employment. We further document formal layoff and recall patterns consistent with rent extraction from the UI system. Workers are laid off as they become eligible for UI benefits and recalled just when benefits cease. Salary patterns around the reform are consistent with firms and workers sharing rents through lower equilibrium salaries. |
| Keywords: | unemployment insurance, informality, labor supply, rent-seeking |
| JEL: | J21 J22 J46 J65 K31 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2020-5&r= |
| By: | Bernardus Van Doornik (Banco Central do Brasil); David Schoenherr (Princeton University); Janis Skrastins (Washington University in St. Louis) |
| Abstract: | Exploiting an unemployment insurance (UI) reform in Brazil, we document formal layoff and recall patterns consistent with rent extraction from the UI system. Firms lay off workers just as they become eligible for UI benefits and recall them just when benefits cease. In addition, firms continue to employ some of the formally laid off workers informally. Salary patterns around the reform are consistent with workers sharing rents with firms through lower equilibrium salaries. We estimate that 2.3 to 11.8 percent of UI payments do not fulfill an insurance purpose, but redistribute income to firms and workers who play the system. |
| Keywords: | unemployment insurance, informality, labor supply, rent-seeking |
| JEL: | J21 J22 J46 J65 K31 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2020-20&r= |
| By: | Simplice A. Asongu (Yaounde, Cameroon); Valentine B. Soumtang (Yaoundé, Cameroon); Ofeh M. Edoh (Yaoundé, Cameroon) |
| Abstract: | This study assesses financial determinants of informal financial sector development in 48 Sub-Saharan African countries for the period 1995-2017. Quantile regressions are used as the empirical strategy which enables the study to assess the determinants throughout the conditional distribution of informal sector development dynamics. The following financial determinants affect informal financial development and financial informalization differently in terms of magnitude and sign: bank overhead costs; net internet margin; bank concentration; return on equity; bank cost to income ratio; financial stability; loans from non-resident banks; offshore bank deposits and remittances. The determinants are presented from a plethora of perspectives, inter alia: U-Shape, S-Shape and positive or negative thresholds. The study not only provides a practical way by which to assess the incidence of financial determinants on informal financial sector development, but also provides financial instruments by which informal financial development can be curbed. |
| Keywords: | Informal finance; financial development; Africa |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:21/077&r= |
| By: | Cano, Alexander; Cortés, Darwin; Mantilla, César; Prada, Laura; Restrepo, Medardo |
| Abstract: | We conduct a lab-in-the-field experiment in which 214 rural workers must choose between a cash or a voucher payment for completing a real-effort task. Participants face a twenty-percent chance of suffering a negative shock that will reduce their cash payment by roughly two-thirds. Opting for the voucher reduces the likelihood of the shock by one-half. We employ a multiple-price list with a varying voucher payment and a fixed cash payment to study this trade-off relevant for expanding the coverage and contributions of rural labor formalization. Voucher take-up rates go from 32% to 56%, from the least to the more generous voucher. In a sample of undergrad students from the same region, take-up rates went from 17% to 33%. We find that voucher redemption costs explain take-up among students but not among rural workers. Being a rural worker with land, and receiving government subsidies in cash, predict a higher voucher take-up. |
| Keywords: | agriculture; dual labor market; informal labor market |
| JEL: | C91 O17 R51 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:rie:riecdt:88&r= |
| By: | Livert-Aquino, Felipe; Miranda, Fidel; Espejo, Andrés |
| Abstract: | El objetivo del presente documento, cuya elaboración forma parte de las actividades del proyecto de la Cuenta de las Naciones Unidas para el Desarrollo “Transformaciones tecnológicas en América Latina: promover empleos productivos y enfrentar el desafío de las nuevas formas de empleo informal”, es analizar la informalidad laboral en Chile desde una perspectiva territorial. Para ello, se aplican modelos predictivos a nivel subnacional utilizando diferentes fuentes de información. Los resultados de las estimaciones correspondientes a las 345 comunas del país reflejan la existencia de significativas diferencias interregionales que fortalecen el argumento de optar por un diseño descentralizado a la hora de implementar una política de formalización del empleo. |
| Date: | 2022–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:47727&r= |
| By: | - |
| Abstract: | El territorio es un elemento clave para definir las desigualdades que afectan a las personas en su acceso a empleos de calidad. A pesar de ello, en América Latina y el Caribe no se dispone, por lo general, de información desagregada a nivel territorial. En este documento se presenta una propuesta metodológica para estimar la probabilidad de ocurrencia de la informalidad laboral a nivel subnacional. Este análisis permitirá recopilar información relevante para el diseño de políticas públicas que tengan en cuenta el territorio, además de ofrecer un instrumento que puede ser aplicado en otros ámbitos para el análisis de diversos fenómenos a escala local. |
| Date: | 2022–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:47726&r= |