assesses these approaches along with the factors related to informality-formality trade-off and the issue of formalisation as a …

. The industry equilibrium is compared to one in which informality is prohibited. With relatively high product demand, the … effect of entrepreneurs being free to choose informality is that consumer surplus and total employment are reduced, but … also show that informality may be a built-in stabilizer or destabilizer. …

-up estimates and relate these to firm-level formality. The average firm-specific mark-up using a trans-log revenue production … ownership form. Zooming in on firm-level registration, we find a formality premium of 16 per cent, even when controlling for … selection into formality. Moreover, a firm size threshold exists, confirming that smaller informal firms are less likely to reap …

jobs, and grow the economy. However, the costs and processes of formality may be too challenging for firms, particularly … the smallest firms, to bear. Thus, informal firms may not be able to survive the transition to formality and attempts to … expand formality may be harmful and counterproductive to job creation and growth. This paper investigates the potential for …