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on Informal and Underground Economics |
| By: | Rajveer Jat (University of California, Riverside, USA); Bharat Ramaswami (Ashoka University) |
| Abstract: | The literature has debated whether the productivity gap between agriculture and non-agriculture reflects mobility barriers or selection. Non-agriculture is not a homogenous category. In developing countries, most of non-agricultural employment is informal. Could it be that the productivity gap is driven by formal sector firms that are numerically small but economically substantial? This paper compares the productivity of agriculture to the informal and formal non-farm sectors in India. The comparison controls for sectoral differences in hours worked, human capital and labor share of value added. The paper finds substantial productivity gaps with the formal sector but small and negligible gaps with the informal non-farm sector. Between 40-50% of non-farm workers are in sectors not more productive than agriculture. These findings suggest that the primary dualism in development is between the formal non-farm sector and the informal sector including agriculture. |
| Date: | 2024–10–25 |
| URL: | https://d.repec.org/n?u=RePEc:ash:wpaper:130 |
| By: | Loungani, Prakash; Emiliano Evaristo Luttini; Hayley Marie Pallan |
| Abstract: | The employment structure in emerging markets and developing economies (EMDEs) differs markedly from that in advanced economies, which has implications for adjustment to cyclical conditions. This paper examines the cyclicality of employment in advanced economies and EMDEs. Although EMDEs exhibit a more violent GDP cycle than advanced economies, advanced economies present a steeper and more violent employment cycle. In the short term, an employment composition that is more biased toward self-employment, which is less cyclical, explains about 70 percent of these differences, while in the medium-term it accounts for about 40 percent. These characteristics explain why, during recessions, employment in advanced economies is more sensitive to economic fluctuations than in EMDEs. |
| Date: | 2025–03–24 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11089 |
| By: | Dalal Moosa; Joanna Abdel Ahad; Vanessa Moreira |
| Keywords: | Social Protections and Labor-Employment and Unemployment Social Protections and Labor-Work & Working Conditions Social Protections and Labor-Labor Law Social Protections and Labor-Social Protections & Assistance |
| Date: | 2023–07 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wboper:40069 |
| By: | Wayne Aaron Sandholtz; Pedro C. Vicente |
| Abstract: | Tax revenue is vital for development, but governments must balance raising revenues with maintaining political support. Partnering with a city government in Mozambique, we experimentally vary the provision of information highlighting the role of municipal tax revenues in 1) local public good provision and 2) local political autonomy. We measure how this information affects property owners’ tax morale and political support for the government. Public goods information raises tax morale, especially in areas of low baseline public good provision, but has no effect on voting. The political message increases electoral support generally, but raises tax morale only among co-partisans. These results suggest that communication about the uses of public revenue offers a politically feasible way to increase tax morale. |
| Keywords: | Tax morale, Public goods, Information, Political economy, Experiments, Mozambique |
| JEL: | O12 H00 P00 C93 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:unl:unlfep:wp671 |