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on Informal and Underground Economics |
| By: | Villena-Roldán, Benjamin |
| Abstract: | In emerging economies, policymakers should care not only about the informality level but also about its persistence, which also has key welfare implications. Considering worker flows that drive people into informality is important for developing effective public policies. Using a Markov representation of worker flows and correcting for time aggregation, I find low persistence of informality in Chile, implying an average duration of nearly 3.5 months, and estimate the contributions of labor market transitions among formality, informality, unemployment, and inactivity. The flow into informality from unemployment is the main force accounting for persistence, which suggests that informality is a temporary shelter from joblessness. I also find informality persistence is higher for females, young workers, and tertiary-educated individuals |
| Keywords: | Informality, unemployment, transition rates, time-aggregation bias |
| JEL: | E24 J46 J64 |
| Date: | 2024–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120868&r= |
| By: | Ozili, Peterson K |
| Abstract: | This article presents a discussion on what a central bank digital currency (CBDC) can achieve in African countries and what a central bank digital currency may not achieve in African countries. The study shows that a central bank digital currency can achieve the following. CBDC can become a monetary policy tool; it can reduce the size of the informal economy; it can increase financial inclusion; it can increase digital financial literacy; it can reduce the circulation of counterfeit paper money; it can deepen existing payments system; it can improve social programmes and targeted welfare; it will increase transaction monitoring and surveillance; it can address tax evasion and increase tax revenue in African countries. The study also shows that a central bank digital currency may not completely replace cash in African countries; the issuance and use of CBDC won’t make African countries earn a ‘developed country’ status; CBDC adoption may not stop institutional corruption; CBDC adoption will not stop illicit activities in African countries; and CBDC adoption may not reduce the level of poverty in African countries. |
| Keywords: | central bank digital currency, CBDC, Africa, poverty, financial inclusion, monetary policy, remittance, informal economy, welfare, corruption. |
| JEL: | E52 E58 E59 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120966&r= |
| By: | Jens-Christian Høj; Viktoriia Klimchuk |
| Abstract: | Before the war, the Ukrainian Pay-As-You-Go pension system required large government transfers. Since then, large scale emigration and an increasing number of people eligible for pensions have further increased the need for government transfers and exacerbated the challenges of population ageing. At the same time, the system provides relatively low pension benefits, despite fairly high contribution rates and short time in retirement. This reflects to a large degree a relatively narrow contribution base due to a large informal economy and underreporting of labour income. Reform of the system must encourage participation, secure liveable pensions, and safeguard the system’s fiscal sustainability. |
| Keywords: | informal labour markets, old-age poverty, pension systems, Public finances |
| JEL: | E6 H55 I32 J46 |
| Date: | 2024–06–06 |
| URL: | https://d.repec.org/n?u=RePEc:oec:ecoaaa:1805-en&r= |