In developing countries, informal firms (those that are not registered with the government) account for about half of … parasite view, informal firms, by avoiding taxes and regulations, unfairly compete with the more efficient formal firms and, by … taking away their market share, undermine economic progress. According to the dual view, informal firms are highly …

We establish five facts about the informal economy in developing countries. First, it is huge, reaching about half of … the total in the poorest countries. Second, it has extremely low productivity compared to the formal economy: informal … regulations is an important reason for informality, the productivity of informal firms is too low for them to thrive in the formal …

This paper investigates the determinants of informal economic activity. We present two equilibrium models of …; firms in the informal sector avoid tax payments but suffer other limitations. In the first model there is a single industry … and informal firms face a higher cost of capital and a limitation on size. As a result informal firms are smaller and have …

incorporating an informal sector, and we evaluate the welfare implications of three different UI schemes with varying degrees of …

than through the market, and self-suppliable services and informal sector supplied products. Using this formulation, we are … once tax induced increases in self supply of previously non taxed goods and services and in informal sector activity (in … small scale construction and other areas) are taken into account. Moreover, since untaxed informal sector supply is …

Do new migration opportunities for rural households change the nature and extent of informal risk sharing? We … the spillover effects on the network gives an incomplete picture of the welfare effects of migration, and (b) informal …

We study the effects of domestic trade liberalization on labor markets in Botswana. South Africa is the dominant member … of the Southern Africa Customs Union. As such, when South Africa liberalized trade in the 1990s, this induced large and … informal firm and self-employment, but mixed evidence of effects on unemployment. Hours worked decreased in response to trade …