Publication:
Fading Away Informality by Development

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dc.contributor.authorTamkoç , M. Nazim
dc.date.accessioned2024-10-25T14:03:03Z
dc.date.available2024-10-25T14:03:03Z
dc.date.issued2024-10-25
dc.description.abstractThis paper focuses on the role of development in informality through higher wages and expanded production possibilities. First, it uses informal, plant-level survey data across countries to document that on average, richer countries have smaller informal, unregistered plants in terms of employment. This negative relationship holds even after controlling for plant-level characteristics. Then, a dynamic general equilibrium model with incomplete tax enforcement is developed such that formal and informal plants coexist in equilibrium. The model allows for two groups of agents operating in the informal sector: those with lower abilities than workers, and those with abilities falling between workers and formal managers. In the model, when plants become more productive, some agents operating informally choose to be workers and some of them transition into formality due to higher wages and better production possibilities, which decreases the mean size of informal plants. The quantitative results indicate that around 30 percent of the increase in aggregate output due to higher productivity is associated with a roughly one-quarter decline in the mean size of informal plants.en
dc.identifierhttp://documents.worldbank.org/curated/en/099204410232416130/IDU1799d976615a4d143f71958318c0d8550037f
dc.identifier.doi10.1596/1813-9450-10956
dc.identifier.urihttps://hdl.handle.net/10986/42297
dc.languageEnglish
dc.language.isoen_US
dc.publisherWashington, DC: World Bank
dc.relation.ispartofseriesPolicy Research Working Paper; 10956
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/igo/
dc.subjectINFORMALITY
dc.subjectECONOMIC DEVELOPMENT
dc.subjectPLANT SIZE
dc.subjectPRODUCTIVITY
dc.subjectDECENT WORK AND ECONOMIC GROWTH
dc.subjectSDG 8
dc.subjectINDUSTRY, INNOVATION AND INFRASTRUCTURE
dc.subjectSDG 9
dc.titleFading Away Informality by Developmenten
dc.typeWorking Paper
dspace.entity.typePublication
okr.crossref.titleFading Away Informality by Development
okr.date.disclosure2024-10-25
okr.date.lastmodified2024-10-23T00:00:00Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099204410232416130/IDU1799d976615a4d143f71958318c0d8550037f
okr.guid099204410232416130
okr.identifier.docmidIDU-799d9766-5a4d-43f7-9583-8c0d8550037f
okr.identifier.doi10.1596/1813-9450-10956
okr.identifier.doihttps://doi.org/10.1596/1813-9450-10956
okr.identifier.externaldocumentum34410018
okr.identifier.internaldocumentum34410018
okr.identifier.reportWPS10956
okr.import.id5564
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099204410232416130/pdf/IDU1799d976615a4d143f71958318c0d8550037f.pdfen
okr.region.geographicalWorld
okr.topicIndustry::Industrial and Consumer Services and Products
okr.topicSocial Protections and Labor::Wages, Compensation & Benefits
okr.topicMacroeconomics and Economic Growth::Economic Development
okr.unitEnterprise Analysis-IFC (DECEA)
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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