The COVID-19 pandemic has escalated processes of labour transition from industrial work to the informal economy, which have always characterized the life of the working poor. Exploring urban-to-rural labour transitions through a feminist political...
We examine the patterns and correlates of the productivity gap between male-owned and female-owned firms for informal enterprises in India. Female-owned firms are on average 45 per cent less productive than male-owned firms, with the clearest...
In spite of having some intensive national strategies to address poverty, Tanzania lacks a coherent national strategy to ensure sustainable livelihoods for those working in its informal economy, of which street vending is an important sector. Based...
This paper studies the impact of the COVID-19 crisis on the gendered dimensions of employment and mental health among urban informal-sector workers in India. First, we find that men’s employment declined by 84 percentage points post-pandemic relative...
The lingering policy dilemma facing many governments in sub-Saharan Africa in recent years is what can be done in the short to medium term to boost the output and incomes of individuals and enterprises in the informal sector, given the size and...
We consider two vertical links between informal- and formal-sector firms and study their implications. In one case, the final products produced by the formal- and informal-sector firms are vertically differentiated in terms of quality, and the size...
While there is general agreement that regulatory avoidance is an important part of firms’ decisions to produce in the informal sector, there is much less agreement on how regulation and enforcement affect firms’ decisions on, inter alia, which sector...
Despite the severe negative economic shock associated with the COVID-19 pandemic, evidence from many contexts points to a surge in sales on online platforms, as well as shifts in the composition of demand. This paper investigates how the pandemic has...
How does informal economic activity respond to increased financial inclusion? Does it become more entrepreneurial? Does access to new financing options change the gender configuration of informal economic activity and, if so, in what ways and what...
We use long-spanning individual longitudinal data to examine the long-term labour market outcomes of low-tier informal workers. We investigate their characteristics, calculate the extent of switching, and identify the characteristics of those who...
In this paper we analyse informal work in Mexico, which accounts for the majority of employment in the country and has grown over time. We document that the informal sector is composed of two distinct parts: salaried informal employment and self...
This paper assesses the participation of female traders, safety factors, and existing policies and legislation in the informal sector in Tanzania. Primary data were obtained from 11 in-depth interviews, 10 focused group discussions, and 236...
In this paper, we investigate the working conditions of the young women working as assistants in the food vending sector in Tanzania using interviews and focus group discussions which are supplemented with quantitative survey. Data were collected in...
Despite a sizeable literature on the labour market effects of maternity leave regulations on women in developed countries, how these policies affect women’s work in developing countries with a large informal sector remains poorly understood. This...
24 September 2013 Roger Williamson Another big weekend for UNU-WIDER. The stage was well set on Thursday 19 September for a consideration of...
This study documents four key facts about informal economic activities: (1) the size of the informal sector varies greatly across nations; (2) this size is strongly correlated with economic development, the tax burden, and the rule of law; (3) the...
The aim of this paper is to quantify the financial cost that informal workers would incur in the event of entering formality, accounting for potential earnings gains upon entry. To do so, we use representative microdata from Ecuador and Colombia...
Almost twenty years have passed since researchers from the Institute for Liberty and Democracy in Peru showed how ‘bad laws’ impose disproportionate costs on those who choose formality. Although a multitude of conflicting regulations still precludes...
Given the current focus of international development policy on pro-poor growth and poverty reduction, the role of the informal sector in the process of economic development is again at the top of the research and policy agenda. A key question is if...
This paper addresses informal cross-border trade in the Horn of Africa, with an emphasis on the Somalia borderlands. It will be shown that despite the collapse of a government in 1991, Somalia’s unofficial exports of cattle to Kenya have grown...
The objective of the paper is to understand the transforming relationship between the formal and informal sector in a liberalizing open developing economy. There are various facets in this relationship, and we focus on three essential aspects. First...
The following essay has three parts. The first is a story about fluctuations in the balance of the relationship between impersonal and personal principles of social organization. This draws heavily on Max Weber’s interpretation of western history...
This paper explores the relationship of the informal economy to the formal economy and to the formal regulatory environment. It begins with a comparison of the earlier concept of the ‘informal sector’ with the new expanded concept of the ‘informal...
Findings of cross-cultural psychology suggest that different approaches to rule enforcement have cultural roots. Individualist societies have established a rule of law, in which rules prevail; collectivist societies have a rule of man, which allows...
The purpose of this report is to give a nuanced picture of the SME business environment in Myanmar as a complement to the 2017 MSME quantitative survey conducted within the project ‘Towards Inclusive Development in Myanmar’. This project is a...
The present paper utilises a short-run theoretical macroeconomic model of a small open economy to look at the impact of macroeconomic policies and financial deepening upon poverty through sectoral changes. This is because an expansion in certain...
This is a brief sketch of the Self Employed Women’s Association’s (SEWA) three-decade-long journey from the local to global and informal to formal sector in search of finding work and income for now 720,000 women workers. Though SEWA remains a local...
This paper argues that poverty originates in the structural injustices of a social order which incapacitates the poor from participating in the growth generating sectors of the economy and leaves them captives in the so called informal sector...
The ILO was founded for social justice, a mandate expressed today in terms of decent work as a global goal, for all who work, whether in formal or informal contexts. In June 2002, the delegates to the International Labour Conference from governments...
Unlike in most Latin American cities, street vendors organized in farmers’ markets popularly known as ferias libres in Santiago de Chile, gained legal recognition early in the twentieth century. Since then, comunas, or local municipalities, have...
This study attempts to determine the extent to which human potential may be unlocked by government or other formal sector actions that induce voluntary contributions by individuals to the activities of Indonesia’s posyandus or village health posts...
One of the most notable phenomena during economic transition is the shrinkage of the public sector and expansion of the not working population, simultaneously with the expansion of both the formal and informal private sectors. We address the related...
Public policy aimed at building capacity among the extremely poor (support for food and nutrition; health; education and, more recently, financial services), combined with a stable macroeconomic environment, has proved to be successful for poverty...
This article studies the impact of the COVID-19 pandemic on the gendered dimensions of employment and mental health among urban informal-sector workers in Delhi, India.First, the study finds that men’s employment declined by 84 percentage points...
This paper provides a comparative summary of recent national statistics from five Latin American countries on employment losses and gains during the peak COVID-19 years compared with pre-pandemic levels. As part of its work on the impact of the...
When the question of creating good jobs and decent work in Africa arises, policymakers and development partners often focus on formalization. For...
What types of businesses benefit or suffer due to geographic clustering? Data available from Cambodia on competition and spillovers—at both village- and commune-level—is useful to answer a number of questions about the effects of clustering and the...
Entrepreneurs are often adversely affected by violent conflict such as civil war. At the same time though entrepreneurs may contribute to or even benefit from violent conflict and other ‘destructive’ and ‘unproductive’ activities that limit economic...
Based on unique panel data consisting of both formal and informal firms, this paper uses a matched double difference approach to examine the relationship between legal status and firm level outcomes in micro, small and medium manufacturing...
This article uses panel data from a survey of small- and medium-sized enterprises in Vietnam to uncover which firms pay bribes and which do not. We also study how bribe paying evolved between 2005 and 2007 and test how the determinants of bribes...
This paper is the first to address the challenges of measuring the labour income share of developing countries. The poor availability and reliability of national accounts data, and the fact that self-employed people, whose labour income is hard to...
Tommaso Ciarli, Saeed Parto and Maria Savona Afghanistan remains one of the poorest countries in the world with an estimated per capita income of 300...
Based on a unique panel dataset consisting of both formal and informal firms surveyed every other year from 2005 to 2013, this paper explores the benefits of formalization to the government and firm employees in Vietnam. We find that formalization...
This paper analyses the consequences of formalisation on the performance of informal firms, using a panel dataset from Vietnam. We find that switching firms (before switching) have higher profit and value added compared to non-switching firms...
This paper investigates if changes in the minimum wage have influenced changes on the formality and informality rates, and the level of wages in Ecuador. A 12-year panel was built. It allows to overcome the short time span of household data and so to...
Is the lack of ‘managerial capital’, alongside human and financial capital, a constraint on the growth of firms in developing countries? The evidence on this is still mixed, especially among small and medium enterprises. This paper uses a panel of...
From the book: Oxford Handbook of Africa and Economics, Vol. 1.
Part of Book Industries without Smokestacks
Tony Addison I started writing this ‘From the Editor’s Desk’ in Accra, to the sound of an African drum band, preparing for a ceremony to mark the...
The informal sector makes up an overwhelming share of both gross domestic product and total employment in Africa. In this paper, we lay out some of the basic characteristics of the informal sector in sub-Saharan Africa, relevant institutions, and...
Myanmar’s transition to a market-based economy is accompanied by rapid development of the private manufacturing sector, which has large potential for improving economic growth. The overall success of the sector, however, should not be taken for...
Using unbalanced panel data from the small and medium enterprise surveys in Vietnam in 2005, 2007, 2009, 2011, 2013, and 2015, this paper investigates factors associated with informality in Vietnam. We assume that household businesses, especially the...
Studies of land property rights usually focus on tenure security and transfer rights. Rights to determine how to use the land are regularly ignored. However, user rights are often limited. Relying on a unique Vietnamese panel data set at both...
Customary rules governing access to land and other natural resources in village societies have characteristics that allow them to fulfill social security functions and achieve equity objectives. This is true of both common-property resources and land...
Part of Book Micro, Small, and Medium Enterprises in Vietnam
Part of Book Micro, Small, and Medium Enterprises in Vietnam
Mutual insurance has been shown, theoretically and empirically, to be incomplete and limited by asymmetric information and lack of enforcement mechanisms. While some research has shown that networks based on kinship, neighbourhood and ethnicity may...
Panel data from villages in rural south India have been used for leading econometric studies on risk-sharing in village economies. The work has influenced debate on safety net design world-wide and has driven scholarly agendas on household economics...
In economic literature insurance networks are often treated as exogenous institutions. Frequently, the assumption is made that some clearly identifiable group (e.g. ‘the whole village’ or ‘the extended family’) constitutes an insurance network. Still...
This paper provides a descriptive analysis of wealth ownership and wealth inequality in Latin American countries, using diverse published sources and primary data analysis for 16 nations. We produce estimates of the distribution of home ownership...
We use public transfers in the form of food aid to test for the presence of risk sharing arrangements at the village level in rural Ethiopia. We reject perfect risk-sharing, but find evidence of partial risk-sharing via transfers. There is also...
Tony Addison We start the new year at a fast pace, preparing for the ReCom results meeting on ‘Aid and the Social Sectors’ in Stockholm on 13th March...
27 May 2014 Wisdom Akpalu The number of fishers and fishing vessels in the capture fishery sector, especially the artisanal marine fishery sub-sector...
30 April 2013 Tony Addison As April closes, our thoughts turn to UNU-WIDER’s spring/summer programme. And it’s a busy one. June sees us back in...
26 March 2014 Roger Williamson Africa is growing, with The Economist noting that 6 out of 10 of the world’s fastest growing economies for 2000-10 were...
Tony Addison This month saw UNU-WIDER in Stockholm for the ReCom results meeting on ‘aid and the social sectors’, which took place at Sida on 13 March...
18 December 2014 Roger Williamson At the UN headquarters in New York on 18 November 2014, Peter Timmer, emeritus professor from Harvard, showed how...
This paper uses national representative data from the Ecuadorian Family Expenditure survey to study the determinants of poverty and informality in the country, taking into account the simultaneous two-way relationship between these two phenomena. The...
This article is part of UNU’s “17 Days, 17 Goals” series, featuring research and commentary in support of the United Nations Sustainable Development...
UNU-WIDER had a busy September. We celebrated our 30th birthday with some 600 people at our three-day conference on ‘Mapping the Future of Development...
This paper examines the relationship between formalization and firm-level outcomes in Vietnam using a unique panel dataset. Results show that switching firms differ from informal non-switching firms, confirming heterogeneity. We also find that...
PAPERBACK: The concepts of formal and informal remain central to the theory and practice of development more than half a century after they were introduced into the debate. They help structure the way that statistical services collect data on the...
Part of Book Informal Labour Markets and Development
With the aim of reducing women’s greater unpaid care work than men’s and increasing women’s paid employment, this paper examines the extent to which World Bank investments address unpaid care work. The paper conducts an in-depth gender analysis of 36...
Part of Journal Special Issue Impact of the Liberalization of the Exchange Rate and Financial Markets in Sub-Saharan Africa
Despite Tanzania’s rapid recent growth, the vast majority of employment creation has been in informal services. This paper addresses the role that different subsectors of formal and informal services have played in Tanzania’s growth. It finds that...
Part of Journal Special Issue Aid and Institution-Building in Fragile States
Part of Book Financial Openness and National Autonomy
Part of Book Reforming Africa's Institutions
Part of Book Financial Development, Institutions, Growth and Poverty Reduction
Part of Journal Special Issue Explaining Violent Conflict
Poor households with little or no wealth are particularly vulnerable to risks that reduce incomes and increase expenditures. This book addresses many of the risk-coping strategies for the rural poor, with a focus on micro level and household actions...
This paper uses national representative data from the Ecuadorian Family Expenditure survey to study the determinants of poverty and informality in the country, taking into account the two-way relationship between these two phenomena. The main...
The 2019 descriptive report of the Myanmar Micro, Small, and Medium Enterprise Survey is the second quantitative report of the Myanmar Enterprises Monitoring System (MEMS) project. MEMS is a four-year project, and is implemented by the Central...
The informal sector has long been viewed as a locus of the disadvantaged, unskilled, and inexperienced workers in under-developed and developing economies. Workers in the informal sector, however, can learn skills and gain experience that could help...
This paper uses a Kaldorian framework to examine the evidence of deindustrialization in developing countries at low levels of income, the jobless growth in these economies and the fast expansion of the informal sector. The questions are specifically...
Effective domestic revenue mobilization has gained renewed urgency, especially in the light of the need to recover from the COVID-19 pandemic. In taxation debates, the ‘informal sectors’ have hitherto been assumed to be a part of the problem and...
The COVID-19 pandemic has escalated processes of labour transition from industrial work to the informal economy, which have always characterized the life of the working poor. This study explores this kind of reverse transition, that is, when the...
Part of Journal Special Issue Women’s Work
Expansion of social protection reach among workers in the large informal economy represents a persisting and thorny challenge in the development context. In Mainland Tanzania, several domestically led policy reforms have been introduced to...
Part of Book The Job Ladder
Part of Journal Special Issue What sustains informality
Part of Journal Special Issue What sustains informality
Africa’s formal economies responded poorly to economic reform measures in the 1980s and 1990s while informal markets and institutions responded dynamically and proved to be more resilient. Using comparative analysis of African informal economies...
Part of Journal Special Issue Entrepreneurship, Developing Countries and Development Economics
Part of Journal Special Issue African Development in an Urban World
Part of Book The Rise of China and India
Examining the economic forces that will shape Africa’s future Africa’s Lions examines the economic growth experiences of six fast-growing and/or economically dominant African countries. Expert African researchers offer unique perspectives into the...
This paper examines how decentralization and informalization are reshaping urban governance in contemporary Africa. By exploring the interface between urban institutional failures and popular organizational solutions, the paper considers how informal...
Over 1.8 billion people, from Central Europe to East Asia, have been involved in the great systemic transformation to market economy, civic society and democracy. The process has brought mixed fruits. The diversification of the current situation is a...
This paper uses household panel data from rural Vietnam to explore the effects of having a relative in a position of political or bureaucratic power on farmers’ agricultural investment decisions. Our main result is that households significantly...
We analyse potential dynamic benefits for a firm from having the option of adopting informal status. Informality may be a stepping stone, without which formality might never be achieved. This result obtains for a broad range of realistic parameter...
This paper discusses the difficulties associated with measuring entrepreneurship in developing countries. Three important dichotomies in the research on entrepreneurship are discussed: formal-informal, legal-illegal, and necessity-opportunity...
The paper examines the relationship between conflict and entrepreneurial activity in Afghanistan, drawing upon a unique data set, the National Risk and Vulnerability Assessment household survey 2005. Afghanistan is severely underdeveloped and poor...
This paper uses a unique panel dataset on firm-level corruption. It contains quantitative information on bribe payments by a sample of formal and informal Vietnamese firms. We show that bribe incidence is highly associated with firm-level differences...
The standard method of testing for efficient risk-sharing in village economies does not allow one to identify vulnerable households, only to make statements about the average risk in the village, or of sub-groups identifiable on the basis of...
Public social insurance is part of the broader social protection “toolbox”, typically understood to comprise also social assistance measures (such as cash transfers, benefits in kind, fuel subsidies and so on), social services and public works (see...
The documented under-representation of marginalized groups in business ownership and the labour market is a concerning issue. This study explores how caste disparities in small-firm entrepreneurship impact on firm performance in India, focusing on...
Institutions are altered by conflict, depending on the scale, duration and type of war. At one extreme, formal political, social and economic institutions may be completely destroyed (e.g. Somalia), while the importance and type of informal...
Warlords compete for turf that provides them with rents and ‘taxable’ resources but they can also offer a semblance of security within their respective territories. This article first examines two economic models of warlord competition. Because such...
Informal systems of relationships may be the most appropriate unit of analysis for understanding the patterns of development of many aspects of corruption, organized crime, markets, and the state. The lack of attention to informal systems can produce...
We use public transfers in the form of food aid to test for the presence of risk sharing arrangements at the village level in rural Ethiopia. We reject perfect risk-sharing, but find evidence of partial risk-sharing via transfers. There is also...
The main purpose of this paper is to look at the incorporation of gender and the informal sector within a general equilibrium framework for India. Moreover, we clarify some important links between a gender aware informal sector based social...
South Africa's high unemployment and small informal economy has been attributed to barriers to entry in informal labour markets. We develop a general equilibrium model based on a typology of informal activities that captures formal/informal linkages...
By globalization we mean an external shock; specifically an increased world demand for various goods (or bads) including the products and services which are illegal. We analyse the effects of these shocks on growth and capital stocks by utilizing two...
In this working paper we provide an overview of two recent special journal issues on violent conflict and entrepreneurship. These are the special issue of the Journal of Small Business and Entrepreneurship (2011) and the special issue of the Journal...
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