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Defining informality vs mitigating its negative effects

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  • Elizabeth Ruppert Bulmer

    (World Bank, USA)

Abstract

There are more informal workers than formal workers across the globe, and yet there remains confusion as to what makes workers or firms informal and how to measure the extent of it. Informal work and informal economic activities imply large efficiency and welfare losses, in terms of low productivity, low earnings, sub-standard working conditions, and lack of social insurance coverage. Rather than quibbling over definitions and measures of informality, it is crucial for policymakers to address these correlates of informality in order to mitigate the negative efficiency and welfare effects.

Suggested Citation

  • Elizabeth Ruppert Bulmer, 2018. "Defining informality vs mitigating its negative effects," IZA World of Labor, Institute of Labor Economics (IZA), pages 442-442, August.
  • Handle: RePEc:iza:izawol:journl:2018:n:442
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    References listed on IDEAS

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    Cited by:

    1. Shweta Bahl & Ajay Sharma, 2021. "Education–Occupation Mismatch and Dispersion in Returns to Education: Evidence from India," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(1), pages 251-298, January.
    2. Tshepiso Gaetsewe, 2020. "Characteristics of Firms in Botswana's Informal Economy," Working Papers 74, Botswana Institute for Development Policy Analysis.
    3. Shweta Bahl & Ajay Sharma, 2024. "Informality, education-occupation mismatch, and wages: evidence from India," Applied Economics, Taylor & Francis Journals, vol. 56(19), pages 2260-2294, April.

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    More about this item

    Keywords

    definition of informality; informal employment; measurement; correlates of being informal;
    All these keywords.

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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