in present paper, first the concept of informal economy and its place in the economic literature has been described. then the causes and factors involved in providing the informal sector was examined and the volume of informal economy was estimated. second, the effect of inflation on informal economy was surveyed. to estimate the volume of informal sector, residual discrepancy method was used a...

This paper is concerned with the saddle-path stability of monetary growth rules in a two-country two-sector dynamic stochastic general equilibrium model. Alongside standard features of emerging economies, such as a combination of producer and local currency pricing for exports, fiscal dominance and oil exports, this model also incorporates informal labour and production sectors and examines how...

Employing a unique dataset that covers households from six West African capitals, this paper provides new evidence on the demand for informal sector products and services. We first investigate whether demand linkages exist between formal and informal products and distribution channels, and whether there is an overlapping customer base, which would imply that both formal sector wage earners and ...

In this paper we analyze the pattern of returns to capital in formal and informal manufacturing sector in Ethiopia using a rich panel dataset of formal sector manufacturing firms for the period 1996-2006 and two rounds of repeated cross-sectional data from the urban informal sector firms. Returns to capital in the informal sector are higher than that of the formal sector potentially explaining ...

Th e multiplicity of policies proposed to support the informal sector refl ects the lack of a common defi nition. Although they may produce positive eff ects, these are limited and fail to constitute a comprehensive strategic approach. Th e diff erent interpretations in the absence of a common defi nition as well as the strategies emerging from them are reviewed. Th e identifi cation of informa...

Index Introduction 1 Description of Latin American and Caribbean Informal Sector 3 Extent and composition of the informal sector 3 Determinants of informal employment 9 Determinants of wage differentials 10 Policy Issues: The causes of informal employment 16 Labor market rules and regulations and the Informal Sector 16 Macroeconomic Policies 22 Policy Issues: The consequences of informal employ...

This paper investigates the output gap between the formal and informal sectors in three Western African countries: Benin, Mali and Senegal. Using original matched employer-employee databases, we find evidence of low physical and human capital returns in these countries when considering the informal sector. There is also evidence that these economies are deeply cleaved between productive and non...

Given the current focus of international development policy on pro-poor growth and poverty reduction, the role of the informal sector in the process of economic development is again at the top of the research and policy agenda. A key question is if pro-poor growth policies have to address the informal sector specifically and in any particular way or if the informal sector evolves like the rest ...

In this paper we construct a search and matching model that allows us to analyze the effects of labor market policies in an economy with a significant informal sector. What we mean by an informal sector is a sector that is unregulated and hence not directly affected by labor market policies such as severance or payroll taxes. Nonetheless we find that labor market policies in effect only in the ...