Informality

Abstract

Most low- and middle-income countries are characterised by a large informal sector, which implies that a substantial fraction of economic activity in these countries is completely unregulated. This has important implications for the behaviour of firms, workers, families, and consumers, with these micro-level consequences of informality potentially combining to have important effects on aggregate outcomes such as productivity, output, and growth. This VoxDevLit summarises a wide range of studies ranging from well-identified empirical analyses to macro and structural equilibrium models of informality. The final goal is to provide an accessible, integrated understanding of the causes and consequences of informality for economic development.

Reference

Gabriel Ulyssea, Matteo Bobba, and Lucie Gadenne, “Informality”, VoxDevLit, vol. 6, n. 1, January 2023.