While there is general agreement that regulatory avoidance is an important part of firms' decisions to produce in the informal sector, there is much less agreement on how regulation and enforcement affect firms' decisions on, inter alia, which sector they locate in, their employment decisions,...

Using unbalanced panel data from the small and medium enterprise surveys in Viet Nam in 2005, 2007, 2009, 2011, 2013, and 2015, this paper investigates factors associated with informality in Viet Nam. We assume that household businesses, especially the top tier firms, become formal either...

Is the lack of "managerial capital", alongside human and financial capital, a constraint on the growth of firms in developing countries? The evidence on this is still mixed, especially among small and medium enterprises. This paper uses a panel of Vietnamese small and medium enterprises to...

This paper reports a negative relationship between the size of the shadow economy and generalized trust, in a sample of countries, both developed and developing. That relationship is robust to controlling for a large set of economic, policy, and institutional variables, to changing the estimate...

Many informal firms in developing countries would not be viable if they were to comply with the minimum wage law. This means the authorities have an incentive to turn a blind eye to nonenforcement in a substantial share of firms. We also survey enforcement mechanisms for the minimum wage across...

Expansion of social protection reach among workers in the large informal economy represents a persisting and thorny challenge in the development context. In Mainland Tanzania, several domestically led policy reforms have been introduced to increasingly expand social protection for informal...

Encouraging informal firms to register with the government is a key policy issue for developing economies. However, the impact of formal registration on firm performance remains inconclusive. This paper constructs a nationally representative panel data set on registered and unregistered...

This paper studies the COVID-19 pandemic's impact on Indonesia's labor market, using the exogenous timing of the pandemic in a seasonal difference-in-differences framework. We use multiple rounds of Indonesia's National Labor Force Survey to establish a pre-pandemic employment trend and...

This paper analyzes the effects of an unfunded pension system on economic growth using an extended overlapping generations model to include the informal sector. Emerging countries usually have a more significant informal sector than advanced ones. The findings based on the Thai economy data...