Inequality and informality

• 成果类型: Article
• 署名作者: Chong, Alberto; Gradstein, Mark
• 署名单位: Ben-Gurion University of the Negev; Inter-American Development Bank
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2006.08.001
• 发表日期: 2007
• 页码: 159-179
• 关键词: Informal sector; shadow economy; INEQUALITY; institutional quality

摘要

This paper presents theory and evidence on the determinants of the size of the informal sector. We propose a simple theoretical model in which it is positively related to income inequality, more so under weak institutions, and is negatively related to the economy's wealth. These predictions are then empirically validated using different proxies of the size of the informal sector, income inequality, and institutional quality. The results are shown to be robust with respect to a variety of econometric specifications. We also find that government interventions through regulations lose much of its robustness in the presence of the above factors. (c) 2006 Elsevier B.V. All rights reserved.