Publication:
Does Informality Depress Investments and Job Recovery?: Firm-Level Evidence from the COVID-19 Crisis in South Asia

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dc.contributor.authorPereira-López, Mariana
dc.contributor.authorGrover, Arti
dc.date.accessioned2023-10-09T18:22:32Z
dc.date.available2023-10-09T18:22:32Z
dc.date.issued2023-10-09
dc.description.abstractUsing three rounds of the World Bank's Business Pulse Surveys in South Asia, this paper quantifies the relationship between informality and firms' investment and employment decisions. Accounting for multidimensionality in definition and the margins of informality, the analysis suggests that first, informal firms remain credit and liquidity constrained before and during the crisis, especially the necessity firms. In the pre-crisis period, access to finance is correlated with the extensive margin of informality, while during the crisis, both margins of informality matter. Second, informal firms perceive uncertainty to be higher because of pessimistic expectations on recovery and lower ability to predict future sales, especially the necessity firms. Third, credit constraints and accentuated uncertainty among informal firms discourage investments. Finally, while employment growth is slow and gradual for formal firms as they begin to recover sales, job growth in informal firms does not correspond to the recovery. The results suggest that countries with a large informal sector may face unusually depressed investments and jobs recovery and may have to deploy additional policy levers to accelerate recovery in the post-crisis period.en
dc.identifierhttp://documents.worldbank.org/curated/en/099707110032313266/IDU09a08e2a405fb50426e0899303f14635b17cb
dc.identifier.doi10.1596/1813-9450-1080
dc.identifier.urihttps://openknowledge.worldbank.org/handle/10986/40437
dc.languageEnglish
dc.language.isoen
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper; 10580
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/igo/
dc.subjectCOVID-19
dc.subjectCRISIS
dc.subjectFIRMS
dc.subjectINFORMALITY
dc.subjectJOBS
dc.titleDoes Informality Depress Investments and Job Recovery?en
dc.title.subtitleFirm-Level Evidence from the COVID-19 Crisis in South Asiaen
dc.typeWorking Paper
dspace.entity.typePublication
okr.crossref.titleDoes Informality Depress Investments and Job Recovery?: Firm-Level Evidence from the COVID-19 Crisis in South Asia
okr.date.disclosure2023-10-03
okr.date.lastmodified2023-10-03T00:00:00Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099707110032313266/IDU09a08e2a405fb50426e0899303f14635b17cb
okr.guid099707110032313266
okr.identifier.docmidIDU-9a08e2a4-5fb5-426e-8993-3f14635b17cb
okr.identifier.doi10.1596/1813-9450-10580
okr.identifier.doihttp://dx.doi.org/10.1596/1813-9450-10580
okr.identifier.externaldocumentum34174274
okr.identifier.internaldocumentum34174274
okr.identifier.reportWPS10580
okr.import.id1950
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099707110032313266/pdf/IDU09a08e2a405fb50426e0899303f14635b17cb.pdfen
okr.region.geographicalSouth Asia
okr.sectorSocial Protection
okr.themeLabor Market Institutions,Job Creation,Human Development and Gender,Data Development and Capacity Building,Social Protection,Social Development and Protection,Private Sector Development,Labor Market Policy and Programs,Public Sector Management,Active Labor Market Programs,E-Government, incl. e-services,Job Quality,Jobs,Data production, accessibility and use,Public Administration,Social protection delivery systems
okr.topicPrivate Sector Development::Competitiveness and Competition Policy
okr.topicSocial Protections and Labor::Employment and Unemployment
okr.topicPrivate Sector Development::Private Sector Economics
okr.unitOffice of the Chief Economist (SARCE)
okr.unitIFC
relation.isAuthorOfPublicationb51303b6-af29-592e-989d-eab9ca69edc9
relation.isAuthorOfPublication.latestForDiscoveryb51303b6-af29-592e-989d-eab9ca69edc9
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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