The Long Shadow of Informality : : Challenges and Policies.

• Author: Ohnsorge, Franziska.
• TeilnehmendeR: Yu, Shu.
• Place / Publishing House: Washington, D. C. : : World Bank Publications,, 2022.; Ã2021.
• Year of Publication: 2022
• Edition: 1st ed.
• Language: English
• Physical Description: 1 online resource (353 pages)

Table of Contents

Cover -- Half Title -- Title Page -- Copyright Page -- Summary of Contents -- Table of Contents -- Foreword -- Acknowledgments -- Authors -- Executive Summary -- Abbreviations -- Chapter 1 Overview -- Motivation -- Key findings and policy messages -- Synopsis -- Future research directions -- References -- PART I: Characteristics of the Informal Economy -- Chapter 2 Understanding the Informal Economy: Concepts and Trends -- Introduction -- Definition of informality -- Database of informality measures -- Size and evolution of the informal economy -- Consistency among the various measures of informality -- Cyclical features of the informal economy -- Conclusion -- Annex 2A: Estimation methodologies -- Annex 2B: Tables -- References -- Chapter 3 Growing Apart or Moving Together? Synchronization of Informal- and Formal-Economy Business Cycles -- Introduction -- Literature review: Linkages between formal and informal sectors -- Data and methodology -- Synchronization of formal and informal business cycles -- Causal linkages between formal- and informal-economy business cycles -- Explaining the cyclicality of the informal sector -- Conclusion -- Annex 3A: Theory behind the cyclicality of the DGE-based estimates -- Annex 3B: Model specifications for measuring co-movement among informality measures -- Annex 3C: Causal linkages between formal- and informal-economy business cycles -- Annex 3D: Calibrating DGE estimates using survey-based self-employment data -- References -- PART II: Country and Regional Dimensions -- Chapter 4 Lagging Behind: Informality and Development -- Introduction -- Links between informality and development challenges -- Informality and economic correlates -- Informality and institutions -- Informality and SDGs related to human development -- Informality and SDGs related to infrastructure.

Finding the needle in the haystack: The most robust correlates -- Conclusion -- Annex 4A: Meta-regression analysis -- Annex 4B: Regression analysis -- Annex 4C: Bayesian model averaging approach -- Annex 4D: Tables -- References -- Chapter 5 Informality in Emerging Market and Developing Economies: Regional Dimensions -- Introduction -- Informality in EMDEs -- East Asia and Pacific -- Europe and Central Asia -- Latin America and the Caribbean -- Middle East and North Africa -- South Asia -- Sub-Saharan Africa -- Conclusion -- References -- PART III: Policies -- Chapter 6 Tackling Informality: Policy Options -- Introduction -- Data and methodology -- Fiscal measures -- Other policies -- Conclusion -- Annex 6A: Policies and informality -- Annex 6B: Tables -- References -- Boxes -- 2.1 How does informality aggravate the impact of COVID-19? -- 4.1 Informality and wage inequality -- 4.2 Casting a shadow: Productivity in formal and informal firms -- 4.3 Informality, poverty, and income inequality -- 6.1 Financial development and the informal economy -- Figures -- 1.1 Informality: Main features -- 1.2 Informality: Extent and evolution -- 1.3 Formal- and informal-economy business cycles in EMDEs -- 1.4 Development challenges and informality -- 1.5 Informality in EMDE regions -- 1.6 Policies to address challenges of informality -- 2.1 Informality: Magnitude, variety, and development challenges -- B2.1.1 Informality in EMDEs -- B2.1.2 Features of the informal sector -- B2.1.3 Development challenges -- 2.2 Informality and development -- 2.3 Informality in EMDE regions -- 2.4 Evolution of informality in advanced economies and EMDEs, 1990-2018 -- 2.5 Downward trends in informality, 1990-2018 -- 2.6 Consistency among various informality measures -- 2.7 Volatility of formal and informal economies, 1990-2018.

2.8 Cyclical features of formal and informal business cycles -- 2.9 Employment changes during formal and informal business cycles -- 3.1 Formal- and informal-economy business cycles -- 3.2 Correlations of informal output with formal output -- 3.3 Co-movement between formal and informal business cycles -- 3.4 Coincidence of formal and informal business cycles -- 3.5 Probability of a recession -- 3.6 Impact of formal output fluctuations on the informal sector -- 3C.1 Impact of formal output fluctuations on the informal sector: Alternative instrumental variables -- 3C.2 Impact of formal output fluctuations on the informal sector: Additional robustness checks -- 3C.3 Correlations of informal output with formal output: Shares of informal output and employment -- 3C.4 Impact of formal output fluctuations on shares of output and employment in the informal sector -- 4.1 Development challenges and informality -- B4.1.1 EMDEs: Estimates of informal-formal wage gaps -- 4.2 Features of informal firms and workers -- B4.2.1 Labor productivity in informal firms -- B4.2.2 Formal firms facing informal competition -- B4.2.3 Labor productivity differential of formal firms with and without informal competition -- 4.3 Access to finance and public services -- 4.4 Access to social benefits -- B4.3.1 Informality and poverty and income inequality -- 4.5 Informality and economic correlates -- 4.6 Informality, fiscal indicators, and institutional quality -- 4.7 Informality and SDGs related to human development -- 4.8 Informality and SDGs related to infrastructure -- 4.9 Results from Bayesian model averaging approach -- 5.1 Evolution of informality in advanced economies and EMDEs -- 5.2 Informality in EMDE regions -- 5.3 Correlates of informality in EMDE regions -- 5.4 Informality in East Asia and Pacific -- 5.5 Correlates of informality in East Asia and Pacific.

5.6 Informality in Europe and Central Asia -- 5.7 Correlates of informality in Europe and Central Asia -- 5.8 Informality in Latin America and the Caribbean -- 5.9 Correlates of informality in Latin America and the Caribbean -- 5.10 Informality in the Middle East and North Africa -- 5.11 Correlates of informality in the Middle East and North Africa -- 5.12 Informality in South Asia -- 5.13 Correlates of informality in South Asia -- 5.14 Informality in Sub-Saharan Africa -- 5.15 Correlates of informality in Sub-Saharan Africa -- 5.16 Informality indicators and entrepreneurial conditions in Sub-Saharan Africa -- 6.1 Policies to address challenges of informality in EMDEs -- B6.1.1 Financial development and informality in EMDEs -- B6.1.2 Evolution of financial development in EMDEs -- B6.1.3 Evolution of output informality following financial development in EMDEs -- 6.2 Tax rates and informality in EMDEs -- 6.3 Firms' tax compliance burdens and informality in EMDEs -- 6.4 Tax morale and informality in EMDEs -- 6.5 Government services in EMDEs, 2000-18 -- 6.6 Informality after improvements in government services -- 6.7 Labor market reforms and informality in EMDEs -- 6.8 Informality after labor market reforms in EMDEs -- 6.9 Firm start-up cost and informality in EMDEs -- 6.10 Governance and informality in EMDEs -- 6.11 Education and informality in EMDEs -- 6.12 Access to finance and informality in EMDEs -- 6A.1 Robustness checks: Evolution of informal output levels following financial development in EMDEs -- Tables -- 2B.1A Summary statistics -- 2B.1B Summary statistics by country groupings -- 2B.2 Spearman rank correlations (across countries within individual years) -- 2B.3 Coincidence of signs of first-differences -- 2B.4 Volatility of formal and informal economies -- 2B.5A Cyclical features of recessions in formal and informal economies.

2B.5B Cyclical features of recoveries in formal and informal economies -- 2B.6A Informal employment during formal and informal business cycles -- 2B.6B Formal and total employment during formal business cycles -- 2B.7 Summary of data coverage -- 2B.8 MIMIC model estimation results, 1993-2018 -- 2B.9 World Values Survey -- 3C.1 IV-2SLS regression: Baseline results -- 4D.1 Data: Meta-regression analysis -- 4D.2 Regression: Meta-regression analysis -- 4D.3 Labor productivity differential between types of firms -- 4D.4 Regression: Labor productivity of formal and informal firms -- 4D.5 Regression: Labor productivity of formal firms facing informal competition -- 4D.6 Regression: Informality, poverty, and income inequality -- 4D.7 Regression: Changes in informality and poverty reduction -- 4D.8 Regression: Changes in informality and improvement in income inequality -- 4D.9 Data: Bayesian model averaging approach -- 4D.10 PIP and posterior means (output informality) -- 4D.11 PIP and posterior means (employment informality) -- 4D.12 Correlates of employment informality in EMDEs -- 4D.13 Correlates of informality in EMDEs: MIMIC-based informal activity and WEF index -- 4D.14 Regression: Developmental challenges and DGE-based output informality in EMDEs -- 4D.15 Regression: Developmental challenges and self-employment in EMDEs -- 6B.1 A summary of empirical studies on financial development and informality -- 6B.2 Data sources of variables used in annex 6A -- 6B.3 Policy indicators and employment informality -- 6B.4 Regression results from local-projection models: DGE-based informal output in percent of GDP -- 6B.5 Regression results from local-projection models: Self-employment in percent of total employment -- 6B.6 Robustness checks: OLS and quantile regressions between policy measures and DGE-based output informality.

6B.7 Robustness checks: OLS and quantile regressions between policy measures and employment informality.