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on Informal and Underground Economics |
| By: | Dorgyles C.M. Kouakou (Univ Rennes, CNRS, CREM – UMR6211, F-35000 Rennes France) |
| Abstract: | Using a large firm-level dataset from the World Bank Enterprise Surveys, which covers 134 countries from 2006 to 2023 and includes over 134, 000 observations, we examine whether past informality affects the credit constraints of registered firms. Estimations, based on the entropy balancing method, indicate that registered firms that began operations informally are more likely to be credit-constrained than those that started in the formal sector. This finding is extremely robust to a variety of robustness tests, including instrumental variables, propensity score matching, potential omitted variables, restricted samples, alternative measures of credit constraints, different specifications such as Linear Probability, Logit, and Probit models, and clustering standard errors at the country level. Heterogeneity analysis reveals that the detrimental impact of past informality lessens with firm size, firm age, and better structural factors like regulatory quality, trade openness, entrepreneurial dynamism, and public spending. Productivity, competition from the informal sector, and the quality of financial statements are key channels through which past informality increases credit constraints for registered firms. |
| Keywords: | Past informality status; Credit constraints; Entropy balancing |
| JEL: | G20 O12 O16 O17 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:tut:cremwp:2024-08 |
| By: | Francesco Amodio (McGill University); Pamela Medina (University of Toronto); Monica Morlacco (University of Southern California) |
| Abstract: | This paper shows that self-employment shapes labor market power in low-income countries, affecting industrial development. Using Peruvian data, we show that wage-setting power increases with concentration, but less so where self-employment is more prevalent. A general equilibrium model shows that while concentration increases oligopsony power, it also raises labor supply elasticity by pushing workers into self-employment, thereby mitigating labor market power. Conversely, pro-competitive policies that draw workers into salaried jobs may increase labor market power, with limited overall impact. We demonstrate that these policies are only effective if they tackle labor market power. |
| Keywords: | labor market power, monopsony, self-employment, sorting, development |
| JEL: | J2 J3 J42 L10 O14 O54 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:2418 |
| By: | Guillermo Cruces (CEDLAS-IIE-FCE-UNLP & CONICET & U. of Nottingham); Dario Tortarolo (DECRG World Bank); Gonzalo Vazquez-Bare (UC Santa Barbara) |
| Abstract: | We develop a framework to analyze partial population experiments, a generalization of the cluster experimental design where clusters are assigned to different treatment intensities. Our framework allows for heterogeneity in cluster sizes and outcome distributions. We study the large-sample behavior of OLS estimators and cluster-robust variance estimators and show that (i) ignoring cluster heterogeneity may result in severely underpowered experiments and (ii) the cluster-robust variance estimator may be upward-biased when clusters are heterogeneous. We derive formulas for power, minimum detectable effects, and optimal cluster assignment probabilities. All our results apply to cluster experiments, a particular case of our framework. We set up a potential outcomes framework to interpret the OLS estimands as causal effects. We implement our methods in a large-scale experiment to estimate the direct and spillover effects of a communication campaign on property tax compliance. We find an increase in tax compliance among individuals directly targeted with our mailing, as well as compliance spillovers on untreated individuals in clusters with a high proportion of treated taxpayers. |
| JEL: | C01 C93 H71 H26 H21 O23 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:dls:wpaper:0337 |
| By: | DE SOUZA NASCIMENTO, LAURA |
| Abstract: | Female entrepreneurship is the set of businesses conceived or led by women. It also encompasses the presence of women in leadership positions. Some of the reasons why women start their own businesses are the search for economic independence, professional fulfillment, personal and family fulfillment. Most of the time, due to the lack of formal jobs, women seek entrepreneurship as an alternative for work and income. But currently, women still face more difficulties than men when it comes to entrepreneurship. |
| Date: | 2024–09–02 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:grvyn |