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on Informal and Underground Economics |
| By: | Hartmut Lehmann; Anzelika Zaiceva |
| Abstract: | This paper takes stock of informal employment in Russia analysing its incidence and determinants. Using the regular 2003-11 waves and an informality supplement of the Russian Longitudinal Monitoring Survey (RLMS) it develops several measures of informal employment and demonstrates that the incidence varies widely across the different definitions. We also show that the determinants of informal employment are roughly stable across the different measures: workers who are males, relatively young, unskilled and employed in construction and trade and related services have a higher likelihood to have an informal job. We also take a look at the issue of labour market segmentation along the informal-formal divide by estimating an informal-formal wage gap at the means and across the entire wage distributions. We find only weak evidence for labour market segmentation in Russia when estimating an informal-formal wage gap for salaried workers at the mean. The results of quantile regressions show a wage penalty in the lower half of the distribution and no gap in the upper half for informal employees. In contrast, informal self-employed and entrepreneurs have conditional mean wages that are higher than the mean wages for the formally employed. Across the entire wage distribution, however, we find a negative wage gap in the lowest quartile and a strongly positive wage gap in the highest quartile, pointing to a segmented informal sector with a lower free entry tier and an upper rationed tier. This Working Paper relates to the 2014 OECD Economic Survey of the Russian Federation (www.oecd.org/eco/surveys/russia). L'emploi informel en Russie : Définitions, incidence, déterminants et segmentation du marché du travail Ce document de travail propose un bilan sur l'emploi informel en Russie et analyse son incidence et ses déterminants. En utilisant les données régulières 2003-11 et un supplément sur l'informalité de l'Enquête "Russian Longitudinal Monitoring Survey" (RLMS), nous suggérons plusieurs mesures de l'emploi informel et démontrons que l'incidence varie considérablement selon les différentes définitions. Nous montrons également que les déterminants de l'emploi informel sont à peu près stables avec les différentes mesures: les travailleurs hommes, relativement jeunes, non qualifiés et employés dans la construction et le commerce et les services connexes ont une probabilité plus élevée d'avoir un emploi informel. Nous examinons également la question de la segmentation du marché du travail en terme de division entre marché formel et informel en estimant l'écart de salaire entre secteurs en moyenne et sur l'ensemble de la distribution des salaires. Nous ne trouvons que de faibles signes de segmentation du marché du travail en Russie pour l'estimation à la moyenne. Les résultats des régressions par quantile montrent une pénalité salariale pour les employés informels dans la moitié inférieure de la distribution et pas de différence dans la moitié supérieure. En revanche, les indépendants et les entrepreneurs du secteur informel ont des salaires moyens conditionnels plus élevés que les salaires moyens pour l'emploi formel. Sur l'ensemble de la distribution des salaires, cependant, nous constatons un écart salarial négatif dans le quartile inférieur et un écart salarial fortement positive dans le quartile le plus élevé, indiquant un secteur informel segmenté avec libre entrée dans le bas et du rationnement dans le haut. Ce Document de travail se rapporte à l’Étude économique de l’OCDE 2014 sur la Fédération de Russie (www.oecd.org/etudes/russie). |
| JEL: | J31 J40 P23 |
| Date: | 2013–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1098-en&r=iue |
| By: | Szirmai, Adam (UNU-MERIT / MGSoG); Gebreeyesus, Mulu (UNU-MERIT / MGSoG); Guadagno, Francesca (UNU-MERIT / MGSoG); Verspagen, Bart (UNU-MERIT / MGSoG) |
| Abstract: | This report provides an overview of current research on and knowledge about employment trends and policies in sub-Saharan Africa. Access to productive employment is seen as essential for poverty reduction and the inclusion of the poor in wider society. Productive employment is characterised by a. Sufficient income to permit workers and their dependents a level of consumption above the poverty line; b. Stability of this income over time (absence of vulnerability; c. Decent working conditions and working hours. The challenge of African economies lies not so much in open unemployment, as in the quality of employment as defined by earnings, vulnerability and working conditions. Much employment is located in the informal sector, where vulnerability is a serious problem. High youth employment in young populations is another serious challenge. Causes of employment problems include: lack of the right kinds of structural change, skill mismatches on the labour market, insufficient attention for SMEs with growth potential and insufficient innovation. The paper discusses a wide range of policies to promote productive employment including trade policies, sectoral policies, innovation policies, population policies and employment and labour market policies. The paper concludes with a discussion of emerging debates and contrasting views with regard to productive employment. It summarises the debates on agricultural led industrial development, resource based industrialisation, emergence of non-traditional exports, employment in labour intensive modern commercial agriculture, the role of manufacturing in growth and employment creation, the exploitation of unlimited supplies of labour, role of FDI and promoting pro-poor innovation in the informal sector. |
| Keywords: | productive employment, vulnerability, working conditions, unemployment, structural change, skill mismatches, employment policies |
| JEL: | J21 J24 J28 O2 O4 |
| Date: | 2013–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2013062&r=iue |
| By: | Roubaud, François; Nordman, Christophe Jalil; Nguyen, Huu Chi |
| Abstract: | In spite of its predominant economic weight in developing countries, little is known about the informal sector earnings structure compared to that of the formal sector. Taking advantage of the rich VHLSS dataset in Vietnam, in particular its three wave panel data (2002, 2004, 2006), we assess the magnitude of various formal–informal earnings gaps while addressing heterogeneity at three different levels: the worker, the job (wage employment vs. self-employment) and the earnings distribution. We estimate fixed effects and quantile regressions to control for unobserved individual characteristics. Our results suggest that the informal sector earnings gap highly depends on the workers’ job status and on their relative position in the earnings distribution. Penalties may in some cases turn into premiums. By comparing our results with studies in other developing countries, we draw conclusions highlighting Vietnam’s labour market specificity |
| Keywords: | Informal employment; earnings gap; transition matrix; panel data; Vietnam; |
| JEL: | J21 J23 J24 J31 O17 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/12321&r=iue |
| By: | Ayadi, Lotfi; Benjamin, Nancy; Bensassi, Sami; Raballand, Gael |
| Abstract: | This paper uses mirror statistics and research in the field to estimate the magnitude of Tunisia's informal trade with Libya and Algeria. The aim is to assess the scale of this trade and to evaluate the amount lost in taxes and duties as a result as well as to assess the local impact in terms of income generation. The main findings show that within Tunisian trade as a whole, informal trade accounts for only a small share (5 percent of total imports). However, informal trade represents an important part of the Tunisia's bilateral trade with Libya and Algeria, accounting for more than half the official trade with Libya and more than total official trade with Algeria. The main reasons behind this large-scale informal trade are differences in the levels of subsidies on either side of the border as well as the varying tax regimes. Tackling informal trade is not simply a question of stepping up the number of controls and sanctions, because differences in prices lead to informal trade (and to an increase in corruption levels among border officials) even in cases where the sanctions are severe. As local populations depend on cross-border trade for income generation, they worry about local authorities taking action against cross-border trade. At the same time, customs officials are concerned about the risk of local protests if they strictly enforce the tariff regimes in place. This issue will become even more significant if fuel prices in Tunisia rise again as a result of a reduction in the levels of domestic subsidies. |
| Keywords: | Transport Economics Policy&Planning,Trade Law,Economic Theory&Research,Trade Policy,Emerging Markets |
| Date: | 2013–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6731&r=iue |
| By: | Slobodan Djajić, Alice Mesnard (IHEID, The Graduate Institute of International and Development Studies, Geneva) |
| Abstract: | Guest-worker programs have been providing rapidly growing economies with millions of temporary foreign workers over the last couple of decades. With the duration of stay strictly limited by program rules in most of the host countries and wages paid to guest workers often set at sub-market levels, many of the migrants choose to overstay and seek employment in the underground economy. This paper develops a general-equilibrium model that relates the flow of guest workers transiting to the underground economy to the rules of the program, enforcement measures of the host country and market conditions facing migrants at home and abroad. |
| Keywords: | Temporary migration, undocumented workers, underground economy |
| JEL: | F22 |
| Date: | 2013–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp15-2013&r=iue |
| By: | Susan Athey; Scott Stern |
| Abstract: | This paper evaluates the nature, relative incidence and drivers of software piracy. In contrast to prior studies, we analyze data that allows us to measure piracy for a specific product – Windows 7 – which was associated with a significant level of private sector investment. Using anonymized telemetry data, we are able to characterize the ways in which piracy occurs, the relative incidence of piracy across different economic and institutional environments, and the impact of enforcement efforts on choices to install pirated versus paid software. We find that: (a) the vast majority of “retail piracy” can be attributed to a small number of widely distributed “hacks” that are available through the Internet, (b) the incidence of piracy varies significantly with the microeconomic and institutional environment, and (c) software piracy primarily focuses on the most “advanced” version of Windows (Windows Ultimate). After controlling for a small number of measures of institutional quality and broadband infrastructure, one important candidate driver of piracy – GDP per capita – has no significant impact on the observed piracy rate, while the innovation orientation of an economy is associated with a lower rate of piracy. Finally, we are able to evaluate how piracy changes in response to country-specific anti-piracy enforcement efforts against specific peer-to-peer websites; overall, we find no systematic evidence that such enforcement efforts have had an impact on the incidence of software piracy. |
| JEL: | L86 O34 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19755&r=iue |
| By: | Céspedes, Nikita (Banco Central de Reserva del Perú; PUCP); Gutiérrez, Ana Paola (PUCP); Belapatiño, Vanessa (PUCP) |
| Abstract: | Se estudia la duración del desempleo en una economía con alta informalidad, alto autoempleo e inactividad laboral. La duración promedio del desempleo en una economía con estas características (Perú) es aproximadamente tres meses, valor inferior a lo estimado para economías desarrolladas. La tendencia decreciente de este indicador es consistente con el episodio de crecimiento económico. La informalidad laboral, el autoempleo y la inactividad son los principales elementos detrás de la reducida duración del desempleo. La duración también es consistente con la existencia de una relación positiva de la tasa de riesgo de dejar el desempleo y la duración del desempleo para desempleados recientes. Finalmente, se muestra que la duración del desempleo no guarda relación con los cambios en la política de seguro de desempleo. |
| Keywords: | Duración del desempleo, tasa de riesgo, desempleo, informalidad, duración, empleo, seguro de desempleo |
| JEL: | J21 J62 J63 J64 J65 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:rbp:wpaper:2013-022&r=iue |
| By: | Alfred Boss |
| Abstract: | It is argued that the German system of supporting low wage income earners by government transfers gives incentives for employers and employees to contract low wages and then to exploit the government. The paper analyses if such incentives do exist. It turns out that this is the case under specific conditions. However, minimum wages are not the adequate remedy to abolish the incentives to exploit the government |
| Keywords: | Minimum wages, social assistance, incentives to work, shadow economy |
| JEL: | H24 H26 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1884&r=iue |