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Tax and social expenditure policies have a crucial role in income distribution. This study explores the potential role of taxation and social expenditure policies in income redistribution in South Asia. For this purpose, empirical analysis is conducted by Fixed Effect (FE) and Instrumental Variable (IV) FE models. The analysis suggests that both taxation and social expenditures policies effectively reduce income inequality in South Asia. These findings indicate that social spending and taxation can be used as a policy tool to redistribute income in developing countries. The results also indicate that higher social spending, increased direct taxes, and more reliance on foreign debts can ameliorate the income distribution. Based on the results, it can be suggested that for this region, with the low level of taxes, direct taxes, a large informal economy, and other weak features of tax administration, more reliance on direct taxes and social expenditure policies should be the primary tool for income redistribution.JEL Classification: H2, H5, I3How to Cite:Khan, S., & Padda, I. U. H. (2021). The Impact of Tax and Social Expenditure Policies on Income Distribution: Evidence from South Asia. Etikonomi, 20(2), xx – xx. https://doi.org/10.15408/etk.v20i2.18121.

Informal work is traditionally large in Russia and has further increased in the recent years. We explore the implications of this shift in terms of wage dynamics. Our characterization is based on the estimation of informal pay gaps at the mean and along the wage distribution, relying on the Russian Longitudinal Monitoring Survey for 2003–2017. Our approach comprises three original features: we rely on unconditional quantile effects of informality, we incorporate quantile-specific fixed effects using a tractable approach, and we suggest a treatment of the incidental parameter bias. Over the whole period, informal wage penalties are relatively small and do not suggest heavily segmented labor markets, even at low wage levels. Yet, in the past decade, a substantial negative selection into informal employment and self-employment has taken place, on average and especially at low earnings. Economic downturns and labor market policies have likely contributed to the shakeout of less productive workers in the formal sector, making the low-tier informal sector more of a last resort.

The main aim of this paper is to investigate the effect of the informal economy (IE) on foreign direct investment (FDI) in a sample of petroleum producing countries (Algeria, Norway, the Russian Federation, Saudi Arabia and United States) based on data covering the period of 1991–2018 and using the Non-linear Autoregressive Distribution Lag (NARDL) model. The NARDL model was built separately for each country in the study sample. The main finding of this study is the impact of IE size on FDI inflows in all of the countries in the study sample, even if they are all producing and exporting countries. The empirical results lead to distinguish between two sub-groups. The first sub-group consists of countries whose FDI inflows have been positively affected by positive and negative shocks in the IE. These countries are characterised by a high share of natural resources in their GDP. The second sub-group consists of countries whose inward FDI has been positively affected by negative shocks in the IE and negatively affected by the positive ones. The most common feature of this subgroup is the relative independence of economics from natural resources.

Interest in promoting financial inclusion has increased dramatically in recent years all over the world. The aim of this study is to empirically assess the impact of financial inclusion on the inflation rate in 37 developing countries for a period of 10 years from 2009 to 2018. Initially, Principal Component Analysis (PCA) has been utilized to construct a new multidimensional Financial Inclusion Index (FII) using three dimensions; access, usage, and quality of financial services. Next, 2 step system, Generalized Method of Moments (GMM) was applied to assess the impact of financial inclusion on the inflation rate empirically. The study established that an increased level of financial inclusion has an impact on decreasing the inflation rate in developing countries. It was also found that interest r and official reserves have a significant positive impact on inflation rate. These findings recommend that the policymakers in developing countries should consider financial inclusion as a tool for decreasing the inflation rate and accordingly boost the level of financial inclusion in their countries. Broadening financial inclusion to the informal sector and the rural areas could help in promoting the status of financial inclusion in developing countries.

Purpose of the study. The possibilities for the implementation of national and regional strategic objectives depend on the compliance of the measures taken with the chosen development path. The set of measures includes managerial decisions in the field of labor market regulation and concerning the legalization of informal employment. To make managerial decisions on the regulation of the labor market at the regional level, an objective statistical assessment of the relationship between informal employment and indicators of socio-economic development is required.The information basis for the regulation of informal employment should be quantitatively assessed stable regularities of the relationship between the parameters of informal employment and the structural and dynamic characteristics of economic growth and development. To identify and evaluate these statistical patterns, based on data from the Federal State Statistics Service in a regional context, a system of statistical indicators has been developed and significant factors of informal employment and socio-economic development have been identified. Given the heterogeneity of the constituent entities of the Russian Federation in terms of the scale and structure of informal employment, the distribution of regions into homogeneous groups is required. The article describes the approaches to the classification of Russian regions, taking into account the level of socio-economic development and the structure of informal employment.Materials and methods. The article examines an approach to the distribution of regions into homogeneous groups using the methods of cluster analysis based on a group of indicators characterizing those employed in the informal sector, which is based on the assumption that the indicators of informal employment are causally related to indicators of socio-economic development.Results. Five groups of regions are obtained, homogeneous in terms of the structural characteristics of informal employment and generalized factors of socio-economic development. For the purposes of further interpretation, the selected groups are assessed and ranked relative to the average Russian level of socio-economic development: low level (8 regions), below average (26 regions), average (41 regions), above average (8 regions), high level (2 regions) ...Conclusion. The resulting classification of Russian regions is a transitional stage to the construction of an econometric model of the relationship between informal employment and indicators of socio-economic development. Further analysis will allow us to assess which indicators have the greatest multiplier effect on the regional economy and to obtain a quantitative assessment of this impact on its growth.

The object of research is the theory of formation of the shadow sector of the economy.The paper presents an evolutionary analysis of theories of the shadow economy emergence. It deals with the study of the main theories of the emergence of the informal sector of the economy and determines their features, preconditions of origin, and drivers. Based on the systematization of literary research of scholars, the following groups of theories have been identified: modernization theory, neoliberal theory, institutional theory, the theory of political economy. The analysis of the economic content of the concept of the shadow economy emergence has been used to identify the most influential drivers of the transition of economic entities into the «underground». In particular, the most influential factors include the level of centralization of power, the economic development of the country, the quality of the institutional environment, etc. The analysis of approaches to understanding the definition of the «shadow economy» revealed ambiguous interpretations of the concept of the shadow economy and a significant number of synonyms used in the study of the shadow economy. The Google Trends toolkit was used to prove the multivariate approaches to understanding the essence of this phenomenon. The most common interpretations include the shadow economy, the informal economy, the underground economy, the black economy, and the non-observed economy. The bibliometric analysis of scientific publications in journals indexed in Scopus and WoS databases for 2014–2020 yielded three main clusters, which combine papers that deal with the study of the theory of shadow economy. They are as follows: the shadow economy emerges mainly due to low rates of economic development of the country; the shadow economy emerges due to high unemployment; the growing share of the shadow sector of the economy is a consequence of ineffective government policies. The study concluded that the key task in the implementation of state policy aimed at combating the shadow economy should be coordination the state prevention measures with the most influential drivers of growth in the share of the shadow sector of the economy.

In this paper, we examine the main determinants of tax revenues in Côte d’Ivoire, paying attention to institutional factors and the informal economy. To do this, we apply the autoregressive distributed lag model developed by Pesaran et al. (2001) on annual data covering the period 1984-2016. The results show that the low quality of institutions and the high share of the informal economy are among the factors explaining the low mobilization of tax revenues in Côte d’Ivoire. The results also reveal that GDP per capita, official development assistance, the share of services in GDP, the distribution of income within the population and the education level of the population positively affect tax revenues. On the other hand, trade openness negatively affects tax revenues. Based on these results, the paper provides several recommendations that can help improve tax revenues in Côte d’Ivoire.Keywords: Tax revenue, Institutional quality, Informal economy, Cointegration, Côte d´Ivoire.JEL Classifications: H2, O17DOI: https://doi.org/10.32479/ijefi.10363

The debate on the effects of import competition on sectoral composition of employment remains unsettled. Using the case of the Indian manufacturing sector and exploiting plausibly exogenous variation from Chinese imports, we provide the first causal evidence that higher import competition increases the share of the formal sector employment. We nd an increase in the level of formal sector employment, driven by firms in the top 50% of the productivity distribution, and in contrast, a fall in the informal sector employment. This labor reallocation from informal to formal enterprises is enabled by the usage of contract workers, who do not carry stringent ring costs and are usually not covered by trade unions. Our estimates imply that Chinese import competition led to an increase in the share of formal sector employment by 3.9 percentage points between 2000-2001 and 2005-2006, which suggests an increase in aggregate labor productivity by 3.28%. Our results are robust to an instrumental variables estimation, and controlling for a host of other potential trade channels and worker characteristics.

The paper examines the role of education in reducing gender differentials in the Kenyan labor market. Using 2015/16 Kenya Integrated Household Budget Survey, we estimate the logit and multinomial logit model. The paper employs instrumental variable technique to correct for potential endogeneity that arises when analyzing education and labor market outcomes. The results from both models show that being a woman reduces the chances of entering the labor market. We find that education yields positive effects in the labor market. On average, the difference between the marginal effect of education on employment probability between men and women is two percentage points, with the effect being higher for women. In the multinomial logit model, educated women are more likely to be employed in both the public sector and the informal sector, while in the private sector they are less likely to be employed. The implication of these findings is that policies should target education as a tool that can reduce gender differential in the labor market. This should be coupled with affirmative action that gives priority to women and minimizes preference for men in the labor market.

The primary objective of this paper is to look at the trends and pattern of changes in women's employment structure over years (1983-2018) consequent upon the structural changes in the Indian economy. It also attempts to analyse the quality of women's labour in terms of select parameters. The study finds that there is neither quantitative nor qualitative improvement in women's employment over time on account of structural changes in the economy. There is no 'U' curve of female labour supply in response to GDP growth and expansion of female literacy, implying that economic growth has not generated adequate jobs for women. It also signifies that women's entry or exit of labour market is influenced by non-economic factors also. There is no major occupational diversification in women's employment despite structural shift of the economy from primary to tertiary sector. Agriculture is still the leading sector in women's employment. The study further reveals that the quality of women's labour is poor. Overcrowding of workforce in agriculture largely as wage labourers, lower earnings, poor literacy levels, large-scale informal employment and most self-employment in the form of unpaid work are indications of women's disadvantaged position in the labour market.

This paper explored the determinants of the informal economy size estimations with survey data in the multiple indicators, multiple causes (MIMIC) model. This model enables us to estimate the unknown variable with the known observable variables. The size of the informal economy estimated with observable variables and to conduct the estimation with this model grouped the observable variables of the study as causes and indicators. In the underlying study, the size of informal economy estimations the variables such as harmfulness of shadow economy, growth of money outside banks, taxes burden, the intensity of government regulations, self-employment, unemployment rate, and agricultural sector dominance have the positive effects whereas the real GDP per capita, total employment, institutional quality, and tax morality have negative effects in the estimation of the informal economy size. The study recommended a future line of studies for scholars to undertake the study on the size of the informal economy estimations with the indirect approach using panel data to know the impacts on the regular economy and other related consequences on the economy.

The article is devoted to the problems of social processes researches connected with the emergence of new social strata — precariat. The characteristic of precariat was represented, also reasons and sources of its organization was submitted: such as informal employment, unfair distribution of revenues between labor and capital, unfair distribution of funds between management and labor itself, modern development forces growth, in particular, digital technologies. The possible consequences of its growth and development are described. The influence of the precariat on social and labor relations and the labor behavior of workers is substantiated. The main ways and approaches to the formation of a methodology for studying interaction of precariat with social and labor relations are outlined. The presented material can be used in the development of methods for conducting research on the problems of transforming the social structure of modern society.

Reducing poverty is a critical topic of policy discussion across the world. Developing countries and post-conflict environments commonly face poverty growth. At present, Afghanistan is experiencing the highest rate of poverty in the world; only one tenth of the Afghan population has access to financial services that are mostly localized within the capital and regional cities. In this paper I hypothesize financial inclusion as a contextualized model that can significantly reduce the rate of poverty. I use a set of timeseries data on financial inclusion determinants excluding insurance as the explanatory variables and linearly regress them on the rate of poverty from 2004 to 2018. The statistical results reveal that ATMs per 100,000 adults in the country significantly reduce poverty by 0.25% by increasing capital mobility and remittances. Credit cards and borrowing facilities to the informal economy have significant coefficients of 0.00635% and 0.0207% respectively on poverty reduction as an emergent strategy. The security variable has a significant coefficient of 41% reduction of poverty. Among all other variables tested, extending mobile money facilities is also significant and reduces poverty by 0.015%.

Purpose This study aims to investigate the role and spillover effects of the financial sector on the size of the informal economic activity in Turkey. Design/methodology/approach Time series analysis has been adopted for annual data of the 1970-2017 period. New approaches in unit root and cointegration tests have been used in this study. Estimations have been done via dynamic ordinary least squares and fully modified ordinary least square approaches. Findings Results confirm the existence of a long-run equilibrium relationship between the financial system and informal economic activities in Turkey. At the earlier stages of financial development (FD), informality tends to rise while in further stages, informality tends to decline over time. This study confirms the U-shaped relationship between FD and the informal economy in Turkey. Research limitations/implications This study has used logarithmic values of series in the econometric analysis except for real interest rates because of negative values in some periods. Thus, by using level forms of real interest, missing values would be avoided. Practical implications Increasing efficiency, control and institutional quality, as well as the quality of governance environment, would be useful tools in reducing the size of informality, as this study finds that spillover effects of financial services on the informal economic activity are adverse. Originality/value This study is the first of its kind to the best of the knowledge in the case of Turkey, which estimates the spillover effects of FD on informal economic activity.

Turkey has a large informal economy and has been hit by severe financial crises causing a devastating impact on its economy. The main objective of this paper is to analyse the impact of financial crises on the informal economy in Turkey. We distinguish between four types of financial crises that make up or aggregate financial crises: internal, external, currency and banking crises. Using vector autoregression (VARX) in the presence of two key variables (the financial crisis and the informal economy), we conduct annual time series analysis from 1980 to 2011 and estimate the response of the informal economy to each type of crisis. To our knowledge, this is the first empirical study to examine the effects of financial crises on the informal economy in the context of the Turkish economy. The results show that each type of crisis produces a significantly positive response to the informal economy. In particular, the findings of this paper show that financial crises tend to have a permanent positive effect on the informal economy, suggesting that the informal economy is an important buffer, which tends to expand in times of crises in Turkey. (JEL E26, G01)

This article explores the variation in the wage distributions of two Latin American countries, Bolivia and Colombia, which have had different political and economic strategies in recent years. Using data from household surveys, a decomposition of the wage distribution in each country using functional principal component analysis is conducted. The results suggest that Bolivia, which has implemented state-centered policies, has experienced a general increase in wages, especially benefiting the least skilled workers and the informal sector. On the other hand, the wage distribution in Colombia, whose economic policy has leaned towards market-oriented principles, has become more concentrated around the median wage, mainly due to changes in formal sector wages.

Tanzania's rapid labor productivity growth has been accompanied by a proliferation of small, largely informal firms. Using Tanzania's first nationally representative survey of micro, small, and medium-sized enterprises (MSMEs)—this paper explores the nature of these businesses. It finds that these firms are located in both rural and urban areas and that they operate primarily in trade services and manufacturing. Roughly half of all business owners say they would not leave their job for a full-time salaried position. Fifteen percent of these small businesses contribute significantly to economy-wide labor productivity. The most important policy implication of the evidence presented in this paper is that if the goal is to grow MSMEs with the potential to contribute to productive employment, policies must be targeted at the most promising firms.

This paper establishes an interesting link between informality and time zone differences in a general equilibrium trade model for small open economy. Trading countries are located in different time zones of the world with non-overlapping working hours. Such differences in timing can be utilized in the production of services, and communication technology is an important factor that helps this trading process. In such a setup due to a reduction in communication cost, both skilled and unskilled workers are benefitted, skilled labour using service sector and formal unskilled sector expand. Interestingly, wage inequality between skilled and unskilled workers is widened under reasonable conditions. Another phenomenon that must draw our attention is the contraction of informality due to such changes. Then we extend the basic model to include capital mobility across all sectors and unionized wage in the formal sector. We find that the reduction in communication cost leads to finite change in the structure of production and one of the four sectors of the system vanishes. Subsequently, informal sector contracts while wage disparity is widened.

Purpose Governments in both developing and developed economies play an active role in labor markets in the form of providing both formal public sector jobs and employment through public workfare programs. The authors refer to this as employment targeting. The purpose of the paper is to consider different labor market effects of employment targeting in a stylized model of a developing economy. In the context of a simple search and matching friction model, the authors show that the propensity for the public sector to target more employment can increase the unemployment rate in the economy and lead to an increase in the size of the informal sector. Design/methodology/approach The model is an application of a search and matching model of labor market frictions, where agents have heterogeneous abilities. The authors introduce a public sector alongside the private sector in the economy. Wage in the private sector is determined through Nash bargaining, whereas the public sector wage is exogenously fixed. In this setup, the public sector hiring rate influences private sector job creation and hence the overall employment rate of the economy. As an extension, the authors model the informal sector coupled with the other two sectors. This resembles developing economies. Then, the authors check the overall labor market effects of employment targeting through public sector intervention. Findings In the context of a simple search and matching friction model with heterogeneous agents, the authors show that the propensity for the public sector to target more employment can increase the unemployment rate in the economy and lead to an increase in the size of the informal sector. Employment targeting can, therefore, have perverse effects on labor market outcomes. The authors also find that it is possible that the private sector wage falls as a result of an increase in the public sector hiring rate, which leads to more job creation in the private sector. Originality/value What is less understood in the literature is the impact of employment targeting on the size of the informal sector in developing economies. The authors fill this gap and show that public sector intervention can have perverse effects on overall job creation and the size of the informal sector. Moreover, a decrease in the private sector wage due to a rise in public sector hiring reverses the consensus findings in the search and matching literature which show that an increase in public sector employment disincentivizes private sector vacancy postings.

The use of mobile phones for financial services in the global South has gained prominence in the last decade. These financial technology (FinTech) services, popularly known as mobile money (MM), offer an avenue for financial inclusivity, a recurring theme in the United Nations Sustainable Development Goals. This paper, largely conceptual but interlaced with empirical examples from Ghana and Bangladesh, critically examines the rise of mobile money in the global South. Specifically, it employs David Harvey’s adaptation and redeployment of the laws of accumulation to relate the economic phenomenon of MM to the capitalistic relationship between capital and labor. We argue, among other points, that MM emerges as a techno-market fix to make visible, bankable, and taxable the hitherto invisible, unbanked, and untaxed urban sub-proletariat who are mostly engaged in the informal sector. Thus, whether in sub-Saharan Africa or South Asia, the underlying laws of accumulation through MM are the same: make informality visible in order to decode wealth, and accumulate for the sake of accumulation. We conclude by briefly reflecting on how our arguments contribute to the literature on economic, digital, and development geographies of postcolonial economies in the global South.

The paper provides robust evidence that compliance with Basel Core Principles (BCPs) has a strong positive effect on the Z-score of conventional banks, albeit less pronounced on the Zscore of Islamic banks. Using a sample of banks operating in 19 developing countries, the results appear to be driven by capital ratios, a component of Z-score for the two types of banks. Even though smaller on Islamic banks, individual chapters of BCPs also suggest a positive effect on the stability of conventional banks. The findings support the effective role of BCP standards in improving bank stability, whose important implications led to the Islamic Financial Services Board (IFSB) publication of new recommendations in 2015 to bring BCP standards in line with the Core Principles for Islamic Finance Regulation (CPIFRs) standards. Our findings suggest that because Islamic banks are benchmarked closely to BCPs, the implementation of CPFIRs should also positively affect their stability.

Copyright: © 2021 Muttaqien et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.Indonesia faces a growing informal sector in the wake of implementing a national social health insurance system—Jaminan Kesehatan Nasional (JKN)—that supersedes the vertical programmes historically tied to informal employment. Sustainably financing coverage for informal workers requires incentivising enrolment for those never insured and recovering enrolment among those who once paid but no longer do so. This study aims to assess the ability- and willingness-to-pay of informal sector workers who have stopped paying the JKN premium for at least six months, across districts of different fiscal capacity, and explore which factors shaped their willingness and ability to pay using qualitative interviews. Surveys were conducted for 1,709 respondents in 2016, and found that informal workers’ average ability and willingness to pay fell below the national health insurance scheme’s premium amount, even as many currently spend more than this on healthcare costs. There were large groups for whom the costs of the premium were prohibitive (38%) or, alternatively, they were both technically willing and able to pay (25%). As all individuals in the sample had once paid for insurance, their main reasons for lapsing were based on the uncertain income of informal workers and their changing needs. The study recommends a combination of strategies of targeting of subsidies, progressive premium setting, facilitating payment collection, incentivising insurance package upgrades and socialising the benefits of health insurance in informal worker communities.

We provide evidence, based on a large sample of countries, on the effects of financial crises on key labor market indicators, including official and unofficial employment, unemployment and the participation rate. Crises are followed by a drop in the official market participation rate and by an increase in informal employment. These responses are strongly persistent. Empirical results are then interpreted with a DSGE model which accounts for informality and for financial and labor market frictions. In this framework the informal sector acts as a buffer which absorbs workers in bad times and vice versa. Our simulations suggest the informal sector also is a crisis amplifier for the official economy. For a given financial shock, the ensuing contraction in the official economy is deeper and more persistent the larger the initial size of the unofficial sector. This implies that in less developed economies financial crises cause a relatively stronger reallocation of inputs towards less efficient sectors, expose a larger fraction of the population to the adverse effects of informality, cause a sharper deterioration of public finances limiting governments ability to supply public goods and to engage in countercyclical fiscal policies.

Supplemental Digital Content is available in the text, Objective: To compare number of days lost to illness or accessing healthcare for HIV-positive and HIV-negative individuals working in the informal and formal sectors in South Africa and Zambia. Design: As part of the HPTN 071 (PopART) study, data on adults aged 18–44 years were gathered from cross-sectional surveys of random general population samples in 21 communities in Zambia and South Africa. Data on the number of productive days lost in the last 3 months, laboratory-confirmed HIV status, labour force status, age, ethnicity, education, and recreational drug use was collected. Methods: Differences in productive days lost between HIV-negative and HIV-positive individuals (’excess productive days lost’) were estimated with negative binomial models, and results disaggregated for HIV-positive individuals after various durations on antiretroviral treatment (ART). Results: From samples of 19 330 respondents in Zambia and 18 004 respondents in South Africa, HIV-positive individuals lost more productive days to illness than HIV-negative individuals in both countries. HIV-positive individuals in Zambia lost 0.74 excess productive days [95% confidence interval (CI) 0.48–1.01; P

While scholarship on the politics of labor market divides and labor law in Latin America has bloomed in recent years, this literature rarely looks at the role of public opinion. Using data on public attitudes towards labor law for 18 Latin American countries, we start filling this gap. We follow the literature on labor market divides to see how far those at the margins of the formal labor market differ in their opinions from the formally employed. We find that large segments of the people perceive labor law as protective for workers, but there are also important divides: Whereas formal sector workers indeed assess the protective function of labor law positively, informal sector workers are more sceptical. Moreover, we find feedback effects of labor law on these differences of opinion. We conclude with a discussion how these divides in attitudes also have political effects, especially on voting behavior.

Competition studies that focus on antitrust issues (e.g. market definition, market power) are typically conducted in markets where all firms are assumed to operate legally (competitors are tax-abiding entities, pay for all inputs used in their production process, have paid the proper government licenses to do so, etc.). We investigate competition issues in a market characterized by widespread piracy: subscription TV in Peru. Estimates suggest that 50% of subscription TV users in Peru (30% in Latin America) use an illegal provider. We make use of a unique dataset in which households provided crucial information regarding the (il) legality of their paid TV supplier. Using quantitative antitrust tools based on demand estimation techniques, we study the impact that the presence of the ‘informal’ sector has on competition. Our estimates suggest that the illegal operators constitute a close substitute for (and henceforth significantly constrain the pricing power of) legal operators. This finding can have important antitrust implications: the failure to account for piracy could lead to erroneous conclusions regarding market power measurement and the delineation of the relevant (antitrust) market. This may be particularly important in several industries (especially in the developing world) where the leading operator may be cataloged as “dominant” only in the absence of illegal providers.

This article undertakes an examination of Bangladesh’s latest available Quarterly Labour Force Survey 2015–2016 data to draw in-depth insights on gender wage gap and wage discrimination in Bangladesh labour market. The mean wage decomposition shows that on average a woman in Bangladesh earns 12.2 per cent lower wage than a man, and about half of the wage gap can be explained by labour market discrimination against women. Quantile counterfactual decomposition shows that women are subject to higher wage penalty at the lower deciles of the wage distribution with the wage gap varying between 8.3 per cent and 19.4 per cent at different deciles. We have found that at lower deciles, a significant part of the gender wage gap is on account of the relatively larger presence of informal employment. Conditional quantile estimates further reveal that formally employed female workers earn higher wage than their male counterparts at the first decile but suffer from wage penalty at the top deciles. JEL: C21, J31, J46, J70

The article examines the dynamics of employment (employment level) and key indicators of regional labor markets in Russia in 2010-2017: sectoral structure (by types of organizations, including large, medium, small- and micro-) and sectoral structure, unemployment, and labor migration. The aim of the study was to establish the presence or absence of regional specificity (with the allocation of types) of changes in the key characteristics of labor markets, and to assess the prevailing trends of the processes. It is concluded that a significant impact of the demographic factor in the increase of employment took place in most regions. This factor prevails over economic factors (changes in the number of jobs). The groups of regions based on the causes of changes in the level of employment were defined. The analysis of the regional sectoral structure of employment allowed to assess it for each region of Russia, as well as to point out the key trends: the growth of shadow (informal) employment, the reduction of the role of small and medium – sized businesses, the increase in interregional labor migration as a result of the polarization of the situation in the regional labor markets and the strengthening of national cores in the labor market (Moscow, St. Petersburg and the Tyumen region with Autonomous districts). The study shows the sector shifts in the regional labor markets as a whole, as well as in the sphere of small and medium-sized businesses. It is established that the transition to the American-Asian model continues in the regions. This tendency provide an increase in the share of the tertiary sector due to the reduction of agricultural and industrial employment, but this process became significantly slowed compared to the 90s and 2000s. The dynamics of the indices of structural differences (Gatev and Ryabtsev indices) shows that structural differences between the regions tend to decrease (convergence of structures).

This article aims to analyze the fiscal potential of UEMOA member countries. The question of the fiscal potential of the states is of great importance since the domestic resources represent a high proportion in the financing in Plans and strategies of economic and social development. In this article, we adopt the technique of stochastic border estimation, which is more intuitive—and potentially more relevant for policies—to measure the potential and fiscal effort over the period 1990-2017. The results show that the tax burden is determined by structural factors and that, in most countries, the tax potential is underutilized. Similarly, the fiscal effort shows poor performance in terms of resource mobilization in the majority of countries. These results show that the WAEMU countries can reach or exceed the tax rate of 20% minimum set by the UEMOA if efforts are made to better tax the informal sector. The main contributions of this article have been to justify empirically the increase of the minimum pressure rate in the UEMOA from 17% to 20% and to demonstrate that a better taxation of the agricultural sector would considerably affect the mobilization of tax revenues.

This paper explores the size of the informal economy in Bosnia and Herzegovina (BiH) over the period 1998- 2016, based on an indirect method of measurement known as the MIMIC approach (Multiple Input Multiple Causes). As the underlying determinants of the informal economy in BiH we include tax burden, the level of unemployment, the size of the agricultural sector and the level of government subsidies. We estimate that the average size of the informal economy for the observed period was 34% of GDP, with the largest percentage in 1998 (43%) and the smallest in 2009 and 2016 (30%). There is a modest decreasing trend in the size of the informal economy over time. Our model identifies two structural brakes over the observed period. The first is positive and is linked to the introduction of the value added tax in 2006 (a decrease in 2007-2009 follows). The second captures a short-run negative effect of the latest global economic crisis in 2009 (an increase between 2010-2011). To further asses these results and check their consistency with available primary data, we investigate the size of the undeclared work, assess tax morality and the additional income of families coming from informal sector. These indicators provide consistent results with those of the MIMIC approach.

This paper analyses employment and wage change patterns in India for a period spanning almost three decades, 1983 to 2011. Using data from National Sample Survey Organisation, this study finds evidence of job polarization and wage polarization in urban India particularly strong during the 1990s and somewhat moderate during the 2000s. Our analysis shows a sharp increase in employment and wages in high-skill jobs involving non-routine cognitive tasks, throughout the periods. This expansion in employment has happened at the cost of reduction in middle-skill jobs involving routine tasks. We find that while decline in routine manual employment started in the 1980s, routine cognitive task intensive occupations like clerical, office assistants, and sales started shrinking their share of employment in the 1990s. We argue that the reduction in employment share in routine manual occupations is a result of mechanisation in agriculture and manufacturing sector while the decline in routine cognitive employment share is more of a result of technological upgradation in the Indian industry.

There is an urgent need for a comprehensive study and analysis of negative processes of deepening the level of second relations in the economy. The ghost economy is the result of the functioning and increasing signs of a systemic crisis in the economy, which arises due to the discrepancy and inadequacy of the methods used to implement market transformations. The spread of the gray economy occurred on the basis of the destruction of existing distribution relations and the construction of new ones, which significantly violated the established balance of economic entities interests, the parity of its separate spheres development, and the motivation for effective management. Another meaningful aspect is that the gray sector of the economy in any country really exists; it quickly reacts to changes in the implementation of the state economic life. That is why it is extremely important when studying the problem of increasing the scale of the gray economy is the prompt and rapid accumulation of information dealing with changes in its basic indicators. Hiding of tax revenues is a crime, and tax minimization, that is, an attempt to reduce their amount, is completely legal and provides the work of a large number of specialists in the field of tax law and accounting. But on the other hand, for economic entities operating in Ukraine, the critical threat is not the fiscal capability, but the uncertainty in the legislation and the political and economic life of the country.

Various studies found wage gaps between formal and informal sector workers even after controlling for a number of individual and firm level characteristics. It has also been shown that earnings differentials across these sectors are quite stable over the years. While there is limited amount of research considering the same issues focusing on Turkish labor market, the development of wage gap between formal and informal employment has not been examined. In our paper, we carry this analysis for Turkey and estimate the wage gap between formal and informal sector workers by utilizing the Household Labor Force Survey (LFS) for the period of 2005 and 2019. There are three main findings; first, decline in informal employment is not uniform and especially after 2012 there is a slight increase in the share of informal jobs at the lower end of wage distribution. Second, we demonstrate that returns to informality vary significantly across quantiles even after a matching technique through inverse probability treatment weights are considered. While at the upper end of the distribution, the penalty is extremely small and stable over the years, at the bottom end, the informal sector considerably reduces wages, and the effect becomes larger over time. The negative and increasing penalty is observable well before the refugee inflows. The last part of our analysis looks at the occupational composition within formal and informal sectors over time and points out that the rise of white collar low skilled service (WCLS) jobs among informal employment is mainly responsible for the increasing wage gap for the workers at the bottom end.

This chapter explores the cyclical and structural factors in Mexico regarding their implications for labor markets and labor union organization. In doing so, a longitudinal analysis of the variations in economic performance, unemployment and inflation rates is conducted. In the same way, diverse features of the employed labor force such as employment composition (industrial, services and agricultural employment), the characteristics of the workforce and the dimension of the informal sector are evaluated. Previously, the transition from the Imports Substitution Industrialization (ISI) model to the neoliberal model in Mexico is analyzed as a context of transformation which marked the evolution of the factors related to labor union density decline.

Using a combination of rich administrative and household survey data, we document a series of new facts on earnings inequality and dynamics in a developing country with a large informal sector: Brazil. Since the mid-1990s, both inequality and volatility of earnings have declined significantly in Brazil's formal sector. Higher-order moments of the distribution of earnings innovations show similar cyclical movements in Brazil as in developed countries like the U.S. Earnings mobility is comparatively high, especially at the bottom of the distribution. Compared to the formal sector, earnings are more volatile in the informal sector. Workers who switch between sectors experience earnings innovations that have a positive mean and are positively skewed when moving to the formal sector but have a negative mean and are negatively skewed when moving to the informal sector. A secular shift of employment toward the less volatile formal sector since the early 2000s has contributed to a decline in the economy-wide volatility of earnings.

One of the defining features of China’s economy over the two decades between 1995 and 2015 was the persistent rise of wages for workers and professionals in nearly every segment of the economy—with wage rates for labor-intensive jobs in manufacturing, construction, and the informal service sector rising the fastest. Recently, however, the economic environment in China has begun to change, including changes in both employment and wages. We identify recent employment/wage trends throughout China’s economy and postulate the sources of these trends as well as possible future consequences if they continue. We use official, nationally aggregated data to examine employment and wages in multiple sectors and industries. Our findings indicate that China may have entered a new phase of economic development in the mid-2010s. According to the data, in recent years, wage growth has begun to polarize: Rising for professionals employed in formal skill-intensive industries; and falling for workers in the informal labor-intensive service sector. We attribute this increase in skill-intensive wages to an increase in demand for skill-intensive employment, due to the emergence of a large middle class in China, for whom the demand for high technology, finance, banking, health, and higher education industries is increasing while, at least in the recent short term, the supply of experienced, high-skilled professionals has not kept up. The employment/wage trend in the informal (low-wage) service sector, however, is following a different pattern. While there is a rising demand for services in China’s economy, the growth, due to a number of factors (e.g., large shares of GDP targeted by policymakers to investment; high rates of savings by consumers), is relatively slow. In contrast, due to a number of economic forces, including globalization and automation, the supply of labor into the service sector of the informal economy is being fueled by the flow of labor out of manufacturing and construction (two industries that that have experienced employment declines since 2013). These supply and demand trends, in turn, are leading to the fall in the growth rate of wages in the informal service sector. We conclude by discussing the possible longer-term consequences of these emerging polarization trends based on an examination of recent experience with wage polarization occurring in both middle- and high-income countries, as well as its consequences. We also present policy recommendations for greater investment in education and human capital, as well as for the development of a more comprehensive set of social safety nets for different segments of China’s population.

In our paper, we carry this analysis for Turkey and estimate the wage gap between formal and informal sector workers utilizing panel data from Survey of Income and Living Conditions (SILC) for the period of 2014 and 2017. We consider observable and unobservable characteristics with a fixed effect model, and for sensitivity tests we regard the possibility of nonlinearity in covariate effects and estimate a variant of matching models. Our results show that informal wage penalty is persistent even after unobserved heterogeneity is taken into account, however, the penalty is not statistically significant at the upper end of the wage distribution. There are important differences between regular and irregular workers in terms earnings reductions, and the latter also has slightly lower probability of moving out of informal employment. We also demonstrate that the mobility of lower and upper tier informal workers is affected by different variables.

Over the last decade, Egypt's aquaculture sector has expanded rapidly, which has contributed substantially to per capita fish supply, and the growth of domestic fish markets and employment across the aquaculture value chain. Despite the growing importance of aquaculture sector in Egyptian labour force, only a few studies have explored the livelihoods of Egypt's women and men fish retailers. Even fewer studies have examined gender-based market constraints experienced by these informal fish retailers. This study uses sex-disaggregated data collected in 2013 in three governorates of Lower Egypt to examine the economic and social constraints to scale of enterprises between women (n = 162) and men informal fish retailers (n = 183). Specifically, we employ linear regression method to determine the correlates of enterprise performance. We found that both women and men retailers in the informal fish market earn low profits and face livelihood insecurities. However, women's enterprise performance is significantly lower than that of men even after controlling for individual socio-economic and retailing characteristics. Specifically, the burden of unpaid household work and lack of support therein impedes women's ability to generate higher revenues. These findings strengthen the argument for investing in understanding how gender norms and attitudes affect livelihood options and outcomes. This leads to recommendations on gender-responsive interventions that engage with both men and women and enhance the bargaining power and collective voice of fish retailers.

We assess the effects of a sharp minimum wage increase on wages, informality, and employment in Turkey, a large developing economy with one of the highest minimum wage-to-average wage ratios among OECD countries and widespread discrepancies between labor market outcomes of women and of men. We look at the quasi-experimental 2016 minimum wage increase and pay attention to identifying information coming from demographic groups. We find that the increase in the minimum wage had an economically substantial and statistically significant positive impact on wages. Despite the positive wage effects of the increase, we find no negative employment effects. However, we show that the minimum wage increase may have caused an increase in the share of informal employment among workers with less than tertiary education, especially for such workers working for small firms.

Today, it is statistically evident and, to a large extent, factually verified, that India’s growth trajectory has followed the path of jobless growth. Data provided by the NSSO indicates a falling trend in employment from 2.8% in 2004-05 to a mere 0.5% in 2011-12. Given the sector wise distribution of the labor force, where the share of primary sector is 48.9%, the secondary sector is 23.4% and tertiary sector at 26.8%, 90% of this labor force comes under the informal sector. Past trends point to the fact that despite rigid labor laws in our country, regimes of employment have adapted and converted their ways towards incorporating more and more workers in the informal as opposed to the formal sector, even within the organized sector. In light of this understanding, this paper aims at assessing the rigid labor laws in the Indian economy and their impact on employment opportunities across the country in various sectors. The paper concludes that the prevailing labor laws have prevented the economy from specializing in labor intensive products in which the country has a comparative advantage and thus made the growth process less inclusive. The paper further discusses and attempts to refute the arguments and examples given by sceptics of rigid labour laws. The paper concludes with recommendations of reform strategies that can be advocated to improve and relax certain rigid laws such as Industrial Disputes Act 1947, Factories Act, 1948 and Trade Unions Act 1926.

Those engaging in tax non-compliance have been conventionally explained as rational economic actors partaking when the benefits outweigh the costs, and thus public administrations have sought to enforce compliance using a deterrence approach which increases the risk of detection and penalties. However, many have been found to not engage in tax non-compliance when the benefits exceed the costs. The result has been the emergence of a voluntary compliance approach viewing taxpayers as social actors who engage in tax non-compliance when there is a lack of vertical trust (in governments) and horizontal trust (in others). Using a probit regression analysis of data from special Eurobarometer surveys conducted in 2007, 2013 and 2019, the finding is that although the likelihood of participating in tax non-compliance is largely not associated with the level of penalties and risk of detection, it is significantly associated with the level of vertical and horizontal trust, with participation in tax non-compliance increasing with lower vertical and horizontal trust. The implications for theory and for how public administrations tackle tax non-compliance are then discussed.

The Government of Cambodia recently launched its National Social Protection Policy Framework to strengthen and expand its social protection system. To inform the future direction of social health protection policy in Cambodia we examine the 2016 Cambodia Socio-economic survey to assess the current coverage potential of existing health insurance schemes and coverage gaps; and, compare fair and equitable contribution rates. The current health coverage expansion efforts are likely to primarily benefit individuals from higher income households. In addition, recent directives to expand coverage to some informal workers leaves significant gaps, particularly among vulnerable groups, farmers, and the self-employed. The average out-of-pocket health care costs exceed capacity to pay among individuals in the lower wealth quintiles. Thus, we conclude they should be considered financially vulnerable. Finally, we illustrate that a fair and equitable approach to individual, monthly healthcare contributions will yield low premium rates and collection costs could exceed the amount collected, particularly among the informal sector. Therefore, we recommend that, in addition to other vulnerable groups and uncovered households in the first wealth quintile, people second and third quintiles who are not formally employed, should be exempted from premium payments as social health protection is expanded.

This paper analyses the nature and increasing precarity of India’s employment in the last decade and a half. It examines the trends in informal employment in India in 2004–05, 2011–12 and 2017–18. The analysis reveals that there has been a significant degree of informalisation of employment in the formal sector of the economy, and among regular/salaried workers, who form the predominant section of the formal sector workforce. This has counteracted the potentially positive effect of the economy-wide shift from agricultural to non-agricultural employment, towards regular/salaried work and towards formal sector growth. This result reflects on the long-standing debate in India on the impact of formal labour relations on the formal sector employment. Formal employment is considered to be associated with very rigid labour laws restricting hiring and firing of workers. However, the paper shows that formal sector employment has expanded but with much greater informality of employment. This situation demands urgent attention in order to reverse the increasing precariousness of employment and engage policy levers in reducing the growing labour market inequalities in India.

This chapter presents a theoretical framework for analyzing trends in global gold production, and how these trends are shaping local gold mining practices. While this framework builds on the literature on global production networks (GPN), it also addresses its relative neglect of resource extraction and informal production. We identify three systemic trends in global gold production: rising scarcity, cost pressures, and mounting societal resistance. At the local level, these systemic trends feed into gold mining crystallizations: dynamic and interconnected sets of gold mining practices, in which the factors of production and associated social relations of production crystallize in particular ways. At the same time, these gold mining crystallizations are also embedded in and shaped by the broader institutional and ecological context.

Lebanon has approximately one million Syrian refugees (SR) registered with the United Nations High Commission on Refugees (UNHCR) and an unknown number of unregistered SR, who cannot benefit from formal assistance. This study aimed to examine the livelihoods, coping strategies, and access to healthcare among SR based on registration status and accompanying formal assistance. A mixed-method approach with more emphasis on the qualitative design was adopted. A purposive convenient sampling approach was used to recruit SR from informal tented settlements (ITS) in the Beqaa region in Lebanon. Data collection included 19 focus group discussions (FGDs) that were conducted with participants, who were further divided into three groups: registered refugees with assistance, registered without assistance and unregistered. Twelve in-depth interviews were conducted with key informants from humanitarian organizations. All interviews and FGDs were audio recorded, transcribed, and thematically analyzed. SR were highly dependent on formal assistance when received, albeit being insufficient. Regardless of registration status, refugees resorted to informal livelihood strategies, including informal employment, child labor, early marriage, and accruing debt. Poor living conditions and food insecurity were reported among all SR. Limited healthcare access and high out-of-pocket costs led to limited use of antenatal care services, prioritizing life-threatening conditions, and resorting to alternative sources of healthcare. Severity of these conditions and their adverse health consequences were especially pronounced among unregistered refugees. Our findings shed light on the economic and health disparities among marginalized SR, with the lack of registration and formal assistance increasing their vulnerability. More tailored and sustainable humanitarian programs are needed to target the most vulnerable and hard-to-reach groups.

Exclusive breastfeeding (EBF) for the first six months of life is effective in preventing infant morbidity and mortality. However, 36% of Ugandan children below 6 months are not breastfed exclusively despite its active promotion. This study determined the prevalence and factors associated with exclusive breastfeeding among mothers working in the informal sector in Kampala district. A community based cross-sectional study targeting 428 interviews with mothers with children aged 0-5 months was conducted. Analysis was done using modified Poisson regression in Stata version 14. The prevalence of exclusive breastfeeding was 42.8%. The factors associated with exclusive breastfeeding included: attending antenatal care at least 4 times (APR = 1.24; 95% CI: 1.01-1.51), intention to exclusively breastfeed for 6 months (APR = 1.26; 95% CI: 1.01-1.57) or longer (APR = 1.38; 95% CI: 1.06-1.76), proper breastfeeding practices (APR = 4.12; 95% CI: 2.88-5.90), age of the infant (APR = 0.78; 95% CI: 0.65-0.94) and (APR = 0.48; 95% CI: 0.39-0.60) for children aged 2-3 and 4-5 months respectively and working in a lower position (APR = 0.68; 95% CI: 0.55-0.83). Mothers should be encouraged to attend antenatal care where they learn about the benefits of exclusive breastfeeding to children below 6 months hence enabling them to make informed decisions about exclusive breastfeeding. The government of Uganda should ensure maternity leave benefits of the employment act are enforced in the informal sector to allow women to practice EBF.

This paper examines the trends and patterns in the corporate investment at the aggregate, sectoral and sub-sector level for the period 2011-12 to 2016-18. Using the real Gross Fixed Capital Formation (GFCF) as the measure of investment, the study finds that there has been a significant decline in the investment by the household sector, which suggests that the informal sector is one of the major contributors to the decline in investment in the post-crisis period. Further, there has been significant decline in the growth of corporate investment in recent years which has contributed to a severe economic slowdown in India. Though, the share of the service sector in corporate investment has increased significantly in the recent years, it is the major contributor for the decline in investment in the recent years followed by construction and mining & quarrying. Lastly, the investment in tangible assets constitutes the bulk of the total corporate investment, and the investment in intangibles is insignificant. This indicates that the corporate investment in Research and Development (R&D) is limited in India.