Working Paper

Pathways to Formalization : Going Beyond the Formality Dichotomy -- The Case of Peru

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Díaz, Juan José
dc.contributor.author
Chacaltana, Juan
dc.contributor.author
Rigolini, Jamele
dc.contributor.author
Ruiz, Claudia
dc.date.accessioned
2018-08-15T20:11:18Z
dc.date.available
2018-08-15T20:11:18Z
dc.date.issued
2018-08
dc.date.lastModified
2021-06-08T14:42:47Z
dc.description.abstract
Too often, academics and policy makers interpret formality as a binary choice and formalization as an irreversible process. Yet, formalization has many facets and shades on the business and labor fronts, and firms may not be able or willing to formalize all at once. This paper explores the joint process of business and labor formalization, using a unique panel data set of Peruvian micro enterprises. The paper finds that business formality does not imply labor formality, and vice versa. Further, there is significant churning in and out of different dimensions of formality within a relatively short period. Using an instrumental variable approach, the paper infers that business formalization affects labor formalization but not the other way around, and that enforcement is a key driver of formalization. Overall, the analysis shows that formalization is a gradual and reversible process, with small entrepreneurs weighing their possibilities in each pathway to business (often) or labor (less often) formalization, but rarely both at the same time.
en
dc.identifier
http://documents.worldbank.org/curated/en/528901534251354144/Pathways-to-formalization-going-beyond-the-formality-dichotomy-the-case-of-Peru
dc.identifier.uri
http://hdl.handle.net/10986/30241
dc.language
English
dc.publisher
World Bank, Washington, DC
dc.relation.ispartofseries
Policy Research Working Paper;No. 8551
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo
dc.subject
INFORMALITY
dc.subject
BUSINESS FORMALIZATION
dc.subject
BUSINESS ENVIRONMENT
dc.subject
REGULATION
dc.subject
LABOR FORMALIZATION
dc.subject
SMALL AND MEDIUM ENTERPRISES
dc.subject
LABOR MARKET
dc.subject
MICROENTERPRISE
dc.title
Pathways to Formalization
en
dc.title.subtitle
Going Beyond the Formality Dichotomy -- The Case of Peru
en
dc.type
Working Paper
en
okr.crossref.title
Pathways to Formalization: Going Beyond the Formality Dichotomy: The Case of Peru
okr.date.disclosure
2018-08-14
okr.doctype
Publications & Research
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.docurl
http://documents.worldbank.org/curated/en/528901534251354144/Pathways-to-formalization-going-beyond-the-formality-dichotomy-the-case-of-Peru
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-8551
okr.identifier.externaldocumentum
090224b085f67166_1_0
okr.identifier.internaldocumentum
30346849
okr.identifier.report
WPS8551
okr.imported
true
en
okr.language.supported
en
okr.pdfurl
http://documents.worldbank.org/curated/en/528901534251354144/pdf/WPS8551.pdf
en
okr.region.administrative
Latin America & Caribbean
okr.region.country
Peru
okr.statistics.dr
528901534251354144
okr.topic
Private Sector Development :: Enterprise Development & Reform
okr.topic
Private Sector Development :: Legal Regulation and Business Environment
okr.topic
Private Sector Development :: Microenterprises
okr.topic
Social Protections and Labor :: Labor Law
okr.topic
Social Protections and Labor :: Labor Markets
okr.topic
Social Protections and Labor :: Labor Policies
okr.unit
Social Protection and Jobs Global Practice

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