PurposeRecently when studying mainstream (legitimate) entrepreneurs, the distinction between ‘necessity-driven' entrepreneurs pushed into entrepreneurship because other options for work are absent or unsatisfactory, and ‘opportunity-driven' entrepreneurs pulled into entrepreneurship to...

To evaluate critically the common assumption that consumers purchase goods and services on an off-the-books basis so as to save money, this paper reports a 27-nation European survey that interviewed 26,659 citizens in 2007 about their undeclared transactions. This reveals that saving money is...

We build an equilibrium model of a small open economy with labor market frictions and imperfectly enforced regulations. Heterogeneous firms sort into the formal or informal sector. We estimate the model using data from Brazil, and use counterfactual simulations to understand how trade affects...

We build an equilibrium model of a small open economy with labor market frictions and imperfectly enforced regulations. Heterogeneous firms sort into the formal or informal sector. We estimate the model using data from Brazil, and use counterfactual simulations to understand how trade affects...

In this paper we analyse informal work in Mexico, which accounts for the majority of employment in the country and has grown over time. We document that the informal sector is composed of two distinct parts: salaried informal employment and self-employment. Relative to self-employment and formal...

Despite the severe negative economic shock associated with the COVID-19 pandemic, evidence from many contexts points to a surge in sales on online platforms, as well as shifts in the composition of demand. This paper investigates how the pandemic has affected both the supply of and demand for...

Various studies found wage gaps between formal and informal sector workers even after controlling for a number of individual and firm level characteristics. It has also been shown that earnings differentials across these sectors are quite stable over the years. While there is limited amount of...

This paper introduces a comprehensive database of informal economic activity. The database focuses on measures that have strong cross-country and over time coverage: it includes both model-based and survey-based measures of informality and covers more than 160 economies for the period 1990-2018....

We study the degree of synchronization between formal- and informal-economy business cycles. Using a comprehensive database of informal activity that covers a wide range of informality measures from almost 160 countries over the 1990-2018 period, we report two major results. First, fluctuations...