Inequality and informality in transition and emerging countries

Roberto Dell'Anno

IZA World of Labor, 2021, No 325v2, 325

Abstract: Higher inequality reduces capital accumulation and increases the informal economy, which creates additional employment opportunities for low-skilled and deprived people. As a result, informal employment leads to beneficial effects on income distribution by providing sources of income for unemployed and marginalized workers. Despite this positive feedback, informality raises problems for public finances and biases official statistics, reducing the effectiveness of redistributive policies. Policymakers should consider the links between inequality and informality because badly designed informality-reducing policies may increase inequality.

Keywords: informality; inequality; shadow economy (search for similar items in EconPapers)
JEL-codes: D64 H41 J31 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://wol.iza.org/uploads/articles/325/pdfs/ineq ... erging-countries.pdf (application/pdf)
https://wol.iza.org/articles/inequality-and-inform ... d-emerging-countries (text/html)

Related works:
Journal Article: Inequality and informality in transition and emerging countries (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izawol:journl:2021:n:325

Access Statistics for this article

IZA World of Labor is currently edited by Pierre Cahuc

More articles in IZA World of Labor from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Institute of Labor Economics (IZA) ().