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on Informal and Underground Economics |
| By: | Sugata Marjit; Ranajoy Bhattacharyya; Lei Yang |
| Abstract: | This paper provides a simple demonstration of an empirical observation pointed out by the existing literature that the presence of informality in the production sector of an economy moderates the impact of economic shocks affecting it. We show that in the presence of informality, adverse demand shocks have a lower impact on aggregate output and adverse supply shocks have a lower impact on prices as well as output. Both would imply that countries without having substantial informal sector, largely more affluent nations, would be exposed more to higher prices following such shocks. This is consistent with contemporary evidence of stagflation in developed countries. Being the residual sector, the informal sector inevitably moves in the opposite direction to the formal sector during a bad shock episode, cushioning its aggregate effect. We then show that the argument goes through if the firms have to finance their working capital requirements by borrowing from the market. |
| Keywords: | informal sector, macroeconomic shocks, stagflation |
| JEL: | E23 E26 E63 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10586&r=iue |
| By: | Tsatsura Elena A. (Цацура Елена) (The Russian Presidential Academy of National Economy and Public Administration); Grishina Elena E. (Гришина Елена) (The Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | The challenges for the socio-economic situation in the country have been growing since 2020. The issues of prompt, accessible and sufficient state support for different population groups affected by the current crisis come to the fore, which emphasizes the relevance of this work. The goal of the study is to analyze the prevalence of employment in the informal economy, the financial situation of workers employed in the informal economy, their social support coverage and the need for additional social assistance. The objectives of the study are to analyze the prevalence of informal employment and employment in the informal sector, including among various socio-demographic groups of workers, as well as to analyze the financial situation, social support coverage and the need for additional social assistance for informally employed workers and workers in the informal sector. The methods used include the analysis of data from the Rosstat Labor Force Survey for 2019, 2020 and 2021, as well as the analysis of data from RANEPA surveys conducted in December 2021 and September 2022. The object of the study is those employed in the informal economy in Russia. The subject of the study is the prevalence of employment in the informal economy, the financial situation of workers employed in the informal economy, the social support coverage and the need for additional social assistance. The results of the study show that the share of people working in the informal economy as their main place of work in 2019-2020 amounted to 18-19% of the total number of employees. Among those employed in the informal economy, there is a higher share of men, young workers, people with a lower level of education, employed as blue-collar workers, in the service sector, trade, agriculture and construction. Informally employed employees face increased risks of monetary and deprivation poverty, are more likely to be forced to spend savings, and have high risks of losing their jobs and reducing labor incomes. At the same time, individual entrepreneurs and the self-employed are in a better position than the working population as a whole. The results obtained contribute to the development of ideas about the financial situation of the workers employed in the informal economy. |
| Keywords: | informal economy, informal workers, social support, support measures, economic crisis, needy, poor |
| JEL: | I31 I38 J46 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:w2022076&r=iue |
| By: | Pokida, Andrei (Покида, Андрей) (Russian Presidential Academy of National Economy and Public Administration); Gazieva, Indira (Газиева, Индира) (Russian Presidential Academy of National Economy and Public Administration); Zybunovskaya, Natalia (Зыбуновская, Наталья) (Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | This scientific report presents a study conducted by the Research Center for Social and Political Monitoring of the RANEPA Institute of Social Sciences. The relevance of research. A significant part of the able-bodied population in the country is engaged in in the shadow economy, with a significant amount of funds remaining unaccounted for. There is an obvious need to resolve the conflict of interest between the state and the citizens involved in the shadow economy, to stimulate official employment and limit non-criminal shadow economic activity while maintaining a balance of interests of all economic actors. The goal of the study is to analyze and evaluate the dynamics of the involvement of various groups of the employed population in the shadow labor market, to find optimal solutions stimulating official employment and limiting non-criminal shadow economic activity. The subject of the study is the state and dynamics of the formation of the shadow labor market in modern conditions. The main research method is an all-Russian sociological survey of the employed Russian population and a comparison of the results obtained with earlier surveys. Based on the results of the study, this paper presents an analysis and assessment of the dynamics of the involvement of various groups of the employed population in various forms of shadow relations in the labor market. The study allows us to draw the following conclusions. The results of the study show that over the past two years there has been an increase in the participation of the public in the shadow economy. The largest proportion of informal workers is still noted among those employed in private practice as their main job. Among the hired workers, the share of those without formal registration remains unchanged and even increased slightly over the past year. In general, a significant share of the employed population continues to be quite loyal to various manifestations of non-criminal shadow economic activity. This situation creates the prerequisites for maintaining the involvement of the population in the shadow labor market. Among the measures contributing to the reduction of informal employment, the respondents primarily note a reduction in tax payments, a decrease in social inequality and an increase in the role of social guarantees and social protection for workers in the formal economy. The scientific novelty of this study lies in the fact that it seeks to obtain up-to-date sociological information about the main processes taking place in the shadow labor market, their development trends in a changing epidemiological and socio-economic situation. The recommendations based on the results of the study are related to the need to adjust management decisions in the field of stimulating official employment and limiting the participation of the population in the shadow labor market. |
| Keywords: | shadow labor market, pandemic, private practice, hired workers, informal wages, consumers of goods and services of the shadow market, restrictive measures, sociological survey of the employed population |
| JEL: | J46 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:w2022073&r=iue |
| By: | Brunetti, Marianna (University of Rome Tor Vergata); Zaiceva, Anzelika (University of Modena and Reggio Emilia) |
| Abstract: | Using a unique Italian dataset covering the period 2004-2020, we assess the immigrant-native gap in entrepreneurship and investigate channels behind it. The data allows us to account for many observable characteristics as well as for risk aversion, which is usually not observed, yet crucial for the self-employment decision. Unlike most of the existing empirical literature, we find that immigrants in Italy are less likely to be self-employed. The negative gap is confirmed when propensity score matching methodology is used. Heterogeneity analysis suggests that the negative gap is larger for men, for economic migrants and those coming from Sub-Saharan Africa, while it is not significant for mixed immigrant-native couples, for highly skilled, and for migrants from Asia and Oceania. The largest gap is found for those working in the agricultural sector. Regarding additional channels, we explore the role of access to credit, including the informal one, and whether migrants are credit constrained, as well as the importance of migrant networks, easiness of doing business, and expenditures on services for migrants. Despite finding significant correlations between self-employment and some of these factors, none of them seem to decrease the magnitude of the negative gap. |
| Keywords: | immigrants, self-employment, gender, intermarriage, propensity score matching |
| JEL: | F22 J21 O15 J15 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16314&r=iue |
| By: | Marina Dodlova; Krisztina Kis-Katos; Anna Kochanova; Olivia Wirth |
| Abstract: | We investigate how the arrival and expansion of mobile network access in Uganda influences firm tax behaviour. Access to mobile technologies could broaden government revenues from corporate income tax through the extensive margin: by reducing the costs of formalization, it could increase the number of firms filing corporate income tax. If these newly formalizing firms are also economically successful, they will contribute to the expansion of the tax base. Moreover, mobile technologies could also enhance firm performance directly, resulting in further increases in the tax base. |
| Keywords: | Technology, Tax, Administrative data, Difference-in-differences, Firm performance, Uganda |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2023-99&r=iue |
| By: | Comola, Margherita (Paris School of Economics); Prina, Silvia (Northeastern University) |
| Abstract: | This paper studies how formal financial access affects network-based financial arrangements. We use a field experiment that granted access to a savings account to a random subset of households in 19 Nepalese villages. Exploiting a unique panel dataset that follows all bilateral informal financial transactions before and after the intervention, we show that households that were offered access to an account increased their loans and total transfers to others, independent of the treatment status of the receiver. The increase seemed to be driven by treatment households with more assets and greater financial inclusion at baseline. |
| Keywords: | financial access, savings, networks, financial arrangements |
| JEL: | C93 D14 G21 O16 O17 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16303&r=iue |
| By: | Al Said Ahmat (REGARDS - Recherches en Économie Gestion AgroRessources Durabilité Santé- EA 6292 - URCA - Université de Reims Champagne-Ardenne - MSH-URCA - Maison des Sciences Humaines de Champagne-Ardenne - URCA - Université de Reims Champagne-Ardenne) |
| Abstract: | L'article traite la manière dont les plateformes mobiles banking participent à la transformation de l'économie informelle dans les pays pauvres. L'objectif est de comprendre comment ces plateformes incitent les entrepreneurs informels à s'affilier aux dispositifs transactionnels afin de devenir des entreprises réelles et ainsi créer de la valeur pour leurs entreprises et pour l'économie du pays en général. A partir du cas de l'économie informelle au Tchad, nous montrons comment les petites entreprises se transforment via l'utilisation du mobile banking. |
| Keywords: | Économie informelle, plateforme mobile banking, entreprise locale., Économie informelle plateforme mobile banking entreprise locale, entreprise locale |
| Date: | 2023–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04157984&r=iue |