Our paper investigates the size and development of the informal sector in Nepal using aggregate data over the period 1991 to 2009. Our estimation using the Multiple Indicator Multiple Cause (MIMIC) model shows that the average size of the informal sector has been about 44%. Nepal has been...

This paper presents an empirical analysis of the relationship between fiscal illusion and the shadow economy for 104 countries over the period 1989-2009. We argue that both unobservable phenomena are closely linked to each other, as the creation of a fiscal illusion may be helpful if governments...

Purpose: This paper contributes to the literature concerning the Nigerian informal economy (IE) by estimating its size from 1991 to 2017 and identifying the major causes. Design/methodology/approach: A structural equation approach in the form of the multiple indicators multiple causes (MIMIC)...

Higher inequality reduces capital accumulation and increases the informal economy, which creates additional employment opportunities for low-skilled and deprived people. As a result, informal employment leads to beneficial effects on income distribution by providing sources of income for...