The paper quantitatively investigates, in general equilibrium, the interaction between the firms' choice to operate in the formal or the informal sector and government policy on taxation and enforcement, given a level of regulation. A static version of Ghironi and Melitz's (2005) industry model is used to show that firms with lower productivity endogenously choose to operate in the informal sector. I use cross-country data on taxes, measures of informality, and measures of regulation (entry and compliance costs, red tape, etc) to back out how high the enforcement levels must be country by country to make the theory match the data. Welfare gains from policy reforms can be fairly large. I find also that welfare gains from reducing regulation are almost twice those computed for the policy reform. Finally, distortions associated with informality account for a factor of 1.5 of the output per capita difference between the richest and the poorest countries.
Allgemeine und finanzielle Situation sowie Probleme von Betrieben im informellen Sektor.
Themen: Herkunftsregion und -land; ethnische Gruppenzugehörigkeit; Familienstand; berufliche Aktivitäten des Ehepartners; Beitrag des Ehepartners zum Familieneinkommen; Kinderzahl; Bildungsstand; berufliche Aktivitäten vor der Geschäftsgründung; benötigte Kenntnisse für die Führung des Geschäfts; Art des Kenntniserwerbs; Migrationsgründe; Aufenthaltsdauer in Nima; Geschäftsart und -ort; Art der offerierten Güter bzw. Dienstleistungen; Bezugsquelle für Güter und Ausrüstungsgegenstände; Art der Kunden; Dauer der bisherigen Geschäftstätigkeit; alleiniger Aufbau des Geschäfts bzw. Art der Übernahme; Hilfe bei der Geschäftsgründung; Art der erhaltenen Hilfestellung; Probleme bei der Suche nach Unterstützung; Veränderungen in der Geschäftsgröße; Besitzverhältnisse bei Geschäftsgründung und gegenwärtig; Präferenz für Alleinbesitz; wöchentliche Arbeitsdauer und Geschäftszeiten; Alleinbesitz der Einrichtungs- und Ausrüstungsgegenstände des Geschäfts bzw. Höhe des Eigenanteils; Miteigentümer; Höhe des Wertes der Einrichtungsund Ausrüstungsgegenstände sowie des gesamten Geschäfts; Höhe der laufenden monatlichen Geschäftskosten; Höhe des monatlichen Gewinns sowie des persönlichen Einkommens; Kreditmöglichkeiten und Kreditquellen; Höhe der Kreditzinsen; eigene Kreditvergabe und Art der Kreditnehmer; Höhe der monatlichen Kreditvergabe sowie der Kreditzinsen; geplante Geschäftserweiterungen; erwartete größte Probleme bei einer Geschäftserweiterung; Interesse an einer größeren Unterstützung durch die Regierung sowie präferierte Unterstützungsart; Präferenz für Lohnarbeit oder Selbständigkeit; Bereitschaft zur Investition eines Lotteriegewinns in das Geschäft sowie Umfang einer solchen Investition; Auswirkung einer solchen Investition auf die Neueinstellung von Arbeitskräften; präferierte andere Verwendung eines Lotteriegewinns; vorgenommene Maßnahmen zur Verbesserung des Geschäftes; Anzahl der im Geschäft tätigen Personen sowie detaillierte demographische Angaben zu diesem Personenkreis.
AbstractTurnover (sales) is frequently used in developing countries as a presumptive income tax base to economize on the costs of tax administration and taxpayer compliance. We construct a simple model where a size threshold separates firms paying turnover tax from those paying regular income tax and where firms have the option of producing in the untaxed, informal sector. The optimal turnover tax rate trades off two policy concerns: reducing informality and avoiding strategic reductions in sales by firms seeking to remain below the threshold for the regular income tax. We provide analytical results and calibrate the model to compute the optimal policy using realistic parameter values. Introducing an optimally designed turnover tax induces about 12 percentage points of previously informal enterprises to register for the presumptive regime in the calibrated model.
Informality is a salient feature of labor market in Egypt as it is the case with many developing countries. This is the first study of the determinants of worker transitions between various labor market states using panel data from Egypt. We first provide a diagnosis of dynamic worker flows across different labor market states. We develop transition probabilities by gender across different labor market states utilizing Markov transition processes. Next we identify the effects of individual, household, job characteristics and location on different mobility patterns by estimating a multinomial logit regression. The results point to the highly static nature of the Egyptian labor market. Government employment and the out of labor force are the most persistent labor market states. Further, only a few of the explanatory variables except high levels of education are found to have predictive power in explaining the transitions from formal wage, informal wage, self-employment, unemployment government employment and out of labor market states.
Informality is a salient feature of labor market in Egypt as it is the case with many developing countries. This is the first study of the determinants of worker transitions between various labor market states using panel data from Egypt. We first provide a diagnosis of dynamic worker flows across different labor market states. We develop transition probabilities by gender across different labor market states utilizing Markov transition processes. Next we identify the effects of individual, household, job characteristics and location on different mobility patterns by estimating a multinomial logit regression. The results point to the highly static nature of the Egyptian labor market. Government employment and the out of labor force are the most persistent labor market states. Further, only a few of the explanatory variables except high levels of education are found to have predictive power in explaining the transitions from formal wage, informal wage, self-employment, unemployment government employment and out of labor market states.
With the economic crisis acknowledged in 2008, unemployment strongly increased – mostly due to the fall in the industrial sector – which indicates the possible emergence of a new poor and extremely poor population, alongside the decrease of trade deficit and foreign direct investment. Serbia has a large informal sector estimated at 35 per cent of GDP in 2007, fuelled by a weak regulatory framework, inappropriate tax and expenditure policies, and weaknesses in law enforcement, including the fight against corruption. It remains an important challenge as it reduces the efficiency of economic policies. The government should now focus on the following three issues to attract entrepreneurs in the formal sector: (i) contract enforcement (especially the functioning of the courts); (ii) access to finance (particularly bank credits); and (iii) clear title to land real property.
Informal and formal can be seen as «dual economies» of African countries. Governments oTen concern themselves with the formal, while development agencies oTen support the informal. This paper discusses the full landscape of entrepreneurship, considering both sectors, and the range from small to large within each. It queries whether or not there can be movement within and between sectors, and if the «rages to riches» upward movement, as seen in developed countries, is possible in developing ones. The range of women in traditional micro enterprises to the emerging new generation of African women owners of large ‑scale companies are discussed in particular, but the research applies to both men and women. A paradigm of the entrepreneurial landscape will be presented with variables that consider demographics; types of typical enterprises and firms; product sourcing and markets; start ‑up capital; and movement within and between the sectors. Some conclusions are that the informal ‑formal distinction has been useful to disentangle the landscape, but movement between may not be substantial other than minor taxation for sites and services because of the entry requirements of capital, education, business networks, etc. Similarly, within the formal sector of small to medium to large businesses, there is some movement but they too are limited by access to capital, networks, market intelligence and niches, and product innovation. Nevertheless, there is a growing cadre of women at the top who both confound researchers/donors and provide role models for success within their societies. ; O informal e o formal podem ser vistos como «economias duais» dos países africanos. Os governos normalmente ocupam ‑se do formal enquanto as agências de desenvolvimento apoiam frequentemente o informal. Neste texto discute ‑se o panorama abrangente do empreendorismo, tendo em consideração ambos os sectores e as dimensões – de maiores a menores – das actividades que estes comportam. Questiona ‑se a possibilidade de existir mobilidade dentro e entre os sectores e se a mobilidade ascendente – «de muito pobre a rico» – que se verifica nos países desenvolvidos é possível nos países em desenvolvimento. Discute ‑se em particular um conjunto abrangente, desde as mulheres em micro ‑empresas tradicionais às novas gerações de mulheres africanas proprietárias de grandes empresas, embora a pesquisa se aplique quer a homens quer a mulheres. Apresenta ‑se um paradigma do panorama empresarial, com variáveis que têm em conta a demografia, os tipos de empresas e estabelecimentos típicos, o acesso aos produtos e aos mercados, o capital inicial e a mobilidade dentro e entre sectores. Algumas das conclusões são que a distinção informal ‑formal tem sido útil para compreender o panorama mas que o movimento entre um e outro sector pode não ser substancialmente positivo, excepto em termos de redução das taxas sobre estabelecimentos e serviços devido às exigências no que diz respeito ao capital, à educação, redes de negócio, etc. Da mesma forma, no sector formal e desde as pequenas às médias e grandes empresas, existe alguma mobilidade que, contudo, é igualmente limitada devido ao acesso ao capital, às redes, ao conhecimento do mercado e dos seus nichos, às inovações. Apesar disso, existe um conjunto crescente de mulheres no topo, o que intriga os investigadores e os doadores ao mesmo tempo que servem de modelos de sucesso nas suas sociedades.
