Informality in Latin America and the Caribbean

This paper studies the causes and consequences of informality and applies the analysis to countries in Latin America and the Caribbean. It starts with a discussion on the definition and measures of informality, as well as on the reasons why widesp...

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Main Authors:	Loayza, Norman V., Servén, Luis, Sugawara, Naotaka
Format:	Policy Research Working Paper
Language:	English
Published:	Washington, DC: World Bank 2012
Subjects:	ABUSE ACCOUNTING ADULT POPULATION ADVERSE EFFECT AGRICULTURE BANK POLICY BENCHMARK CONSUMER GOODS CONSUMPTION EXPENDITURE CONTRACT ENFORCEMENT CORRELATION ANALYSIS COUNTRY RISK CREDIT INSTITUTIONS CREDIT PROVISION CURRENCY DEMOGRAPHIC FACTORS DEMOGRAPHIC PRESSURES DEMOGRAPHIC TRANSITION DEMOGRAPHIC TRENDS DEVELOPING COUNTRIES DEVELOPMENT POLICIES DRUGS DUMMY VARIABLE ECONOMIC DEVELOPMENT ECONOMIC FREEDOM ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMICS EDUCATIONAL ATTAINMENT EDUCATIONAL LEVEL EMPLOYMENT EMPLOYMENT TRENDS ENFORCEMENT POWER EXCHANGE CONTROLS EXCHANGE RATE FINANCIAL INSTITUTIONS GDP GDP PER CAPITA GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES IMPORTANT POLICY INCIDENCE OF POVERTY INCOME INCOME DISTRIBUTION INCOME INEQUALITY INFORMAL ECONOMIES INFORMAL ECONOMY INFORMAL EMPLOYMENT INFORMAL SECTOR INSTRUMENT INTELLECTUAL PROPERTY INTERNATIONAL BANK INTERNATIONAL LABOR ORGANIZATION INTERNATIONAL MARKETS JUDICIAL SYSTEM LABOR FORCE LABOR MARKETS LABOR ORGANIZATION LABOR PRODUCTIVITY LABOR REGULATIONS LABOUR LABOUR MARKET LEGAL PROTECTION LEGAL SYSTEM LESS DEVELOPED COUNTRIES LEVEL OF EDUCATION LEVELS OF EDUCATION LOAN LOAN APPLICATIONS LOCAL CURRENCY MACROECONOMICS MARKET ECONOMY MARKET INDEX NEGATIVE EXTERNALITY NPL PENSION POLICY RESEARCH POLICY RESEARCH WORKING PAPER POPULATION DIVISION POVERTY ALLEVIATION PRICE CONTROLS PRIVATE CAPITAL PRODUCTIVITY GROWTH PROGRESS PUBLIC POLICY PUBLIC SERVICES REAL GDP REAL WAGE REGIONAL DUMMY REGRESSION ANALYSIS REGULATORY AUTHORITIES REGULATORY FRAMEWORK REGULATORY FRAMEWORKS REGULATORY REGIME RESPECT RETIREMENT RETURNS RISK DIVERSIFICATION RURAL POPULATION RURAL POPULATIONS SECONDARY SCHOOLING SELF EMPLOYED SELF EMPLOYED WORKERS SELF EMPLOYMENT SKILLED LABOR TAX TAX REVENUES TAXATION TELECOMMUNICATIONS TOTAL EMPLOYMENT TOTAL LABOR FORCE TRANSPORTATION UNEMPLOYMENT USE OF RESOURCES WORKERS WORLD POPULATION YOUNG PEOPLE
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090330131803 http://hdl.handle.net/10986/4083

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spelling	okr-10986-40832021-04-23T14:02:15Z Informality in Latin America and the Caribbean Loayza, Norman V. Servén, Luis Sugawara, Naotaka ABUSE ACCOUNTING ADULT POPULATION ADVERSE EFFECT AGRICULTURE BANK POLICY BENCHMARK CONSUMER GOODS CONSUMPTION EXPENDITURE CONTRACT ENFORCEMENT CORRELATION ANALYSIS COUNTRY RISK CREDIT INSTITUTIONS CREDIT PROVISION CURRENCY DEMOGRAPHIC FACTORS DEMOGRAPHIC PRESSURES DEMOGRAPHIC TRANSITION DEMOGRAPHIC TRENDS DEVELOPING COUNTRIES DEVELOPMENT POLICIES DRUGS DUMMY VARIABLE ECONOMIC DEVELOPMENT ECONOMIC FREEDOM ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMICS EDUCATIONAL ATTAINMENT EDUCATIONAL LEVEL EMPLOYMENT EMPLOYMENT TRENDS ENFORCEMENT POWER EXCHANGE CONTROLS EXCHANGE RATE FINANCIAL INSTITUTIONS GDP GDP PER CAPITA GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES IMPORTANT POLICY INCIDENCE OF POVERTY INCOME INCOME DISTRIBUTION INCOME INEQUALITY INFORMAL ECONOMIES INFORMAL ECONOMY INFORMAL EMPLOYMENT INFORMAL SECTOR INSTRUMENT INTELLECTUAL PROPERTY INTERNATIONAL BANK INTERNATIONAL LABOR ORGANIZATION INTERNATIONAL MARKETS JUDICIAL SYSTEM LABOR FORCE LABOR MARKETS LABOR ORGANIZATION LABOR PRODUCTIVITY LABOR REGULATIONS LABOUR LABOUR MARKET LEGAL PROTECTION LEGAL SYSTEM LESS DEVELOPED COUNTRIES LEVEL OF EDUCATION LEVELS OF EDUCATION LOAN LOAN APPLICATIONS LOCAL CURRENCY MACROECONOMICS MARKET ECONOMY MARKET INDEX NEGATIVE EXTERNALITY NPL PENSION POLICY RESEARCH POLICY RESEARCH WORKING PAPER POPULATION DIVISION POVERTY ALLEVIATION PRICE CONTROLS PRIVATE CAPITAL PRODUCTIVITY GROWTH PROGRESS PUBLIC POLICY PUBLIC SERVICES REAL GDP REAL WAGE REGIONAL DUMMY REGRESSION ANALYSIS REGULATORY AUTHORITIES REGULATORY FRAMEWORK REGULATORY FRAMEWORKS REGULATORY REGIME RESPECT RETIREMENT RETURNS RISK DIVERSIFICATION RURAL POPULATION RURAL POPULATIONS SECONDARY SCHOOLING SELF EMPLOYED SELF EMPLOYED WORKERS SELF EMPLOYMENT SKILLED LABOR TAX TAX REVENUES TAXATION TELECOMMUNICATIONS TOTAL EMPLOYMENT TOTAL LABOR FORCE TRANSPORTATION UNEMPLOYMENT USE OF RESOURCES WORKERS WORLD POPULATION YOUNG PEOPLE This paper studies the causes and consequences of informality and applies the analysis to countries in Latin America and the Caribbean. It starts with a discussion on the definition and measures of informality, as well as on the reasons why widespread informality should be of great concern. The paper analyzes informality's main determinants, arguing that informality is not single-caused but results from the combination of poor public services, a burdensome regulatory regime, and weak monitoring and enforcement capacity by the state. This combination is especially explosive when the country suffers from low educational achievement and features demographic pressures and primary production structures. Using cross-country regression analysis, the paper evaluates the empirical relevance of each determinant of informality. It then applies the estimated relationships to most countries in Latin America and the Caribbean in order to assess the country-specific relevance of each proposed mechanism. 2012-03-19T19:09:42Z 2012-03-19T19:09:42Z 2009-03-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090330131803 http://hdl.handle.net/10986/4083 English Policy Research Working Paper ; No. 4888 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC: World Bank Publications & Research :: Policy Research Working Paper Latin America & Caribbean
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ABUSE ACCOUNTING ADULT POPULATION ADVERSE EFFECT AGRICULTURE BANK POLICY BENCHMARK CONSUMER GOODS CONSUMPTION EXPENDITURE CONTRACT ENFORCEMENT CORRELATION ANALYSIS COUNTRY RISK CREDIT INSTITUTIONS CREDIT PROVISION CURRENCY DEMOGRAPHIC FACTORS DEMOGRAPHIC PRESSURES DEMOGRAPHIC TRANSITION DEMOGRAPHIC TRENDS DEVELOPING COUNTRIES DEVELOPMENT POLICIES DRUGS DUMMY VARIABLE ECONOMIC DEVELOPMENT ECONOMIC FREEDOM ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMICS EDUCATIONAL ATTAINMENT EDUCATIONAL LEVEL EMPLOYMENT EMPLOYMENT TRENDS ENFORCEMENT POWER EXCHANGE CONTROLS EXCHANGE RATE FINANCIAL INSTITUTIONS GDP GDP PER CAPITA GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES IMPORTANT POLICY INCIDENCE OF POVERTY INCOME INCOME DISTRIBUTION INCOME INEQUALITY INFORMAL ECONOMIES INFORMAL ECONOMY INFORMAL EMPLOYMENT INFORMAL SECTOR INSTRUMENT INTELLECTUAL PROPERTY INTERNATIONAL BANK INTERNATIONAL LABOR ORGANIZATION INTERNATIONAL MARKETS JUDICIAL SYSTEM LABOR FORCE LABOR MARKETS LABOR ORGANIZATION LABOR PRODUCTIVITY LABOR REGULATIONS LABOUR LABOUR MARKET LEGAL PROTECTION LEGAL SYSTEM LESS DEVELOPED COUNTRIES LEVEL OF EDUCATION LEVELS OF EDUCATION LOAN LOAN APPLICATIONS LOCAL CURRENCY MACROECONOMICS MARKET ECONOMY MARKET INDEX NEGATIVE EXTERNALITY NPL PENSION POLICY RESEARCH POLICY RESEARCH WORKING PAPER POPULATION DIVISION POVERTY ALLEVIATION PRICE CONTROLS PRIVATE CAPITAL PRODUCTIVITY GROWTH PROGRESS PUBLIC POLICY PUBLIC SERVICES REAL GDP REAL WAGE REGIONAL DUMMY REGRESSION ANALYSIS REGULATORY AUTHORITIES REGULATORY FRAMEWORK REGULATORY FRAMEWORKS REGULATORY REGIME RESPECT RETIREMENT RETURNS RISK DIVERSIFICATION RURAL POPULATION RURAL POPULATIONS SECONDARY SCHOOLING SELF EMPLOYED SELF EMPLOYED WORKERS SELF EMPLOYMENT SKILLED LABOR TAX TAX REVENUES TAXATION TELECOMMUNICATIONS TOTAL EMPLOYMENT TOTAL LABOR FORCE TRANSPORTATION UNEMPLOYMENT USE OF RESOURCES WORKERS WORLD POPULATION YOUNG PEOPLE
spellingShingle	ABUSE ACCOUNTING ADULT POPULATION ADVERSE EFFECT AGRICULTURE BANK POLICY BENCHMARK CONSUMER GOODS CONSUMPTION EXPENDITURE CONTRACT ENFORCEMENT CORRELATION ANALYSIS COUNTRY RISK CREDIT INSTITUTIONS CREDIT PROVISION CURRENCY DEMOGRAPHIC FACTORS DEMOGRAPHIC PRESSURES DEMOGRAPHIC TRANSITION DEMOGRAPHIC TRENDS DEVELOPING COUNTRIES DEVELOPMENT POLICIES DRUGS DUMMY VARIABLE ECONOMIC DEVELOPMENT ECONOMIC FREEDOM ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMICS EDUCATIONAL ATTAINMENT EDUCATIONAL LEVEL EMPLOYMENT EMPLOYMENT TRENDS ENFORCEMENT POWER EXCHANGE CONTROLS EXCHANGE RATE FINANCIAL INSTITUTIONS GDP GDP PER CAPITA GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES IMPORTANT POLICY INCIDENCE OF POVERTY INCOME INCOME DISTRIBUTION INCOME INEQUALITY INFORMAL ECONOMIES INFORMAL ECONOMY INFORMAL EMPLOYMENT INFORMAL SECTOR INSTRUMENT INTELLECTUAL PROPERTY INTERNATIONAL BANK INTERNATIONAL LABOR ORGANIZATION INTERNATIONAL MARKETS JUDICIAL SYSTEM LABOR FORCE LABOR MARKETS LABOR ORGANIZATION LABOR PRODUCTIVITY LABOR REGULATIONS LABOUR LABOUR MARKET LEGAL PROTECTION LEGAL SYSTEM LESS DEVELOPED COUNTRIES LEVEL OF EDUCATION LEVELS OF EDUCATION LOAN LOAN APPLICATIONS LOCAL CURRENCY MACROECONOMICS MARKET ECONOMY MARKET INDEX NEGATIVE EXTERNALITY NPL PENSION POLICY RESEARCH POLICY RESEARCH WORKING PAPER POPULATION DIVISION POVERTY ALLEVIATION PRICE CONTROLS PRIVATE CAPITAL PRODUCTIVITY GROWTH PROGRESS PUBLIC POLICY PUBLIC SERVICES REAL GDP REAL WAGE REGIONAL DUMMY REGRESSION ANALYSIS REGULATORY AUTHORITIES REGULATORY FRAMEWORK REGULATORY FRAMEWORKS REGULATORY REGIME RESPECT RETIREMENT RETURNS RISK DIVERSIFICATION RURAL POPULATION RURAL POPULATIONS SECONDARY SCHOOLING SELF EMPLOYED SELF EMPLOYED WORKERS SELF EMPLOYMENT SKILLED LABOR TAX TAX REVENUES TAXATION TELECOMMUNICATIONS TOTAL EMPLOYMENT TOTAL LABOR FORCE TRANSPORTATION UNEMPLOYMENT USE OF RESOURCES WORKERS WORLD POPULATION YOUNG PEOPLE Loayza, Norman V. Servén, Luis Sugawara, Naotaka Informality in Latin America and the Caribbean
geographic_facet	Latin America & Caribbean
relation	Policy Research Working Paper ; No. 4888
description	This paper studies the causes and consequences of informality and applies the analysis to countries in Latin America and the Caribbean. It starts with a discussion on the definition and measures of informality, as well as on the reasons why widespread informality should be of great concern. The paper analyzes informality's main determinants, arguing that informality is not single-caused but results from the combination of poor public services, a burdensome regulatory regime, and weak monitoring and enforcement capacity by the state. This combination is especially explosive when the country suffers from low educational achievement and features demographic pressures and primary production structures. Using cross-country regression analysis, the paper evaluates the empirical relevance of each determinant of informality. It then applies the estimated relationships to most countries in Latin America and the Caribbean in order to assess the country-specific relevance of each proposed mechanism.
format	Publications & Research :: Policy Research Working Paper
author	Loayza, Norman V. Servén, Luis Sugawara, Naotaka
author_facet	Loayza, Norman V. Servén, Luis Sugawara, Naotaka
author_sort	Loayza, Norman V.
title	Informality in Latin America and the Caribbean
title_short	Informality in Latin America and the Caribbean
title_full	Informality in Latin America and the Caribbean
title_fullStr	Informality in Latin America and the Caribbean
title_full_unstemmed	Informality in Latin America and the Caribbean
title_sort	informality in latin america and the caribbean
publisher	Washington, DC: World Bank
publishDate	2012
url	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090330131803 http://hdl.handle.net/10986/4083
_version_	1764389840294510592

Informality in Latin America and the Caribbean

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