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on Informal and Underground Economics |
| By: | Thomas Dohmen (Bonn University, University of Maastricht and IZA); Melanie Khamis (Wesleyan University and IZA); Hartmut Lehmann (Leibniz Institute for East and Southeast European Studies, University of Regensburg, University of Bologna and IZA); Norberto Pignatti (ISET, HCEO and IZA) |
| Abstract: | Using data from the four waves of the Ukrainian Longitudinal Monitoring Survey – ULMS (2003, 2004, 2007 and 2012), we analyze whether workers with a higher willingness to take risks are more likely to select into informal employment contracts. The data permit us to distinguish between five employment states: formal and informal self-employment, formal salaried employment, voluntary informal salaried employment, and involuntary informal salaried employment. The empirical evidence reveals risk attitudes as a strong causal determinant of the incidence of all types of informal employment but involuntary informal salaried employment. We also provide evidence that our results are not driven by reverse causality: risk attitudes impact on the choice of employment state whilst this latter does not influence risk attitudes. Linking risk attitudes with selection into employment states, we also can establish that along the formal-informal divide the Ukrainian labor market is predominantly segmented for salaried workers whilst it is integrated for the self-employed. |
| Keywords: | Risk attitudes, informal employment, labor market segmentation, Ukraine |
| JEL: | D91 J42 J46 P23 |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:ost:wpaper:401 |
| By: | Morshed, Monzur |
| Abstract: | This paper highlights economic challenges of older workers in precarious employment in Bangladesh. With aging populations and evolving economies from agriculture to manufacturing, many of the older workers especially in informal work such as the garment sector in Bangladesh- face job insecurity, poverty wages, and little protection. For many older women, though it is more difficult because of gender issues such as lower lifetime wages compared to men and limited opportunities in the job market. The study calls for reform of social protection systems and anti-age discrimination legislation; re-skilling programmes; as well as greater cooperation between governments, employers and organizations to help older workers in vulnerable employment. |
| Date: | 2024–11–12 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:uh3py |
| By: | Sugata Marjit; Pranab Kumar Das |
| Abstract: | The paper provides an analysis of the simultaneous existence of the formal and the informal sources of finance and their implications for the rate of growth in an economy. Our main result is that in the presence of two sources of borrowing, viz. formal banking sector with lower interest rate with finance constraint and an informal credit market with a higher interest rate but unlimited amount of availability of loans, the informal source may boost the rate of growth. Hence, without the informal source of finance easily the growth rate could have been lower. The premium associated with the differential interest rate in favour of the informal source unequivocally increases propensity towards investment. Thus higher interest rate in the informal source provides the incentive to save resources from from own production as banks do not lend beyond the quota. Thus, if diminishing returns do not impede marginal productivity too much, availability of informal credit must act as a growth stimulant. Thus the presence of informal credit market can be an effective catalyst for growth and development, contrary to what is generally perceived in the literature on financial inclusion. |
| Keywords: | finance, informal, growth |
| JEL: | G20 O40 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11446 |
| By: | Marcel Boyer; Hicham El Moussaoui; Valentin Petkantchin |
| Abstract: | The aim of our research is to study the persistent challenges of water distribution in a context where supply relies on a network of microentrepreneurs (MEs), often poorly recognized and unprotected at institutional level, but playing an essential role in the well-being, if not the survival, of the target populations. Our analysis focuses on the specific case of microentrepreneurs - working partially or totally in the informal sector - in the precarious districts of Abidjan (Côte d'Ivoire). The central question could be formulated as follows: How can we improve the profitability of MEs by enabling them to move out of the informal sector? L’objet de notre recherche est d’étudier les défis persistants de la distribution d’eau dans un contexte où l’approvisionnement repose sur un réseau de microentrepreneurs (ME), souvent mal reconnus et non-protégés au niveau institutionnel, mais jouant un rôle essentiel au bien-être, voire à la survie des populations visées. Notre analyse porte sur le cas particulier des microentrepreneurs – travaillant partiellement ou totalement dans l’informel – dans les quartiers précaires d’Abidjan (Côte d’Ivoire). La question centrale pourrait être formulée ainsi : Comment améliorer la rentabilité des ME en leur permettant de sortir de l’informel? |
| Keywords: | Microentrepreneurs, institutions, transaction costs, informal economy, water supply, profitability, formalization, Microentrepreneurs, institutions, coûts de transactions, économie informelle, approvisionnement en eau, rentabilité, formalisation |
| JEL: | D02 D04 D23 E14 E26 H44 O17 P37 |
| Date: | 2024–11–05 |
| URL: | https://d.repec.org/n?u=RePEc:cir:cirwor:2024s-05 |