Using firm-level survey data for a large cross section of countries, the paper assesses the gap in labor productivity between formal and informal firms in developing countries for which comparable data are available. It also investigates the impact of competition from informal firms on the labor...

This paper analyzes the role of labor market institutions in explaining the development of shadow economies in European countries. The analysis uses several alternative measures of the shadow sector, and examines the effects of labor institutions on the shadow sector in two specific regions: new...

Cash transactions for goods and services in which no receipts are issued greatly increase the risk of tax evasion. Despite the availability of banking services and alternative payment, key sectors of the economy remain largely cash-based in almost all developing countries. This paper shows the...

This paper finds that informal workers are more likely to have inferior work conditions, but do not necessarily report worse subjective well-being. Starting with lower wages, but also with less regularity of hours and paid vacation, informal workers have higher incidence of envelope payments...

This paper contributes to the economic analysis of illicit activities and money laundering. First, it presents a theoretical model of long-run growth that explicitly considers illicit workers, activities, and income, alongside a licit private sector and a functioning government. Second, it...

This paper uses mirror statistics and research in the field to estimate the magnitude of Tunisia's informal trade with Libya and Algeria. The aim is to assess the scale of this trade and to evaluate the amount lost in taxes and duties as a result as well as to assess the local impact in terms of...

This paper presents estimations of the shadow economies for 162 countries, including developing, Eastern European, Central Asian, and high-income countries over the period 1999 to 2006/2007. According to the estimations, the weighted average size of the shadow economy (as a percentage of...

Increasing tax revenues by reducing the shadow economy has been a central goal of tax policy and administration in the Republic of Korea since the National Tax Service was established as an independent agency in 1966. This paper examines the Tax Incentive for Electronically Traceable Payments,...

Governments around the world have introduced reforms to attempt to make it easier for informal firms to formalize. However, most informal firms have not gone on to become formal, especially when tax registration is involved. A randomized experiment based around the introduction of the...

Trade facilitation projects often assume indirect benefits for small-scale, cross-border traders. Recent studies have shown the challenges faced in Africa by this population, especially women, but it remains unknown in Cambodia and the Lao People's Democratic Republic, despite large trade...