What sustains informality?: A study of the interactions between formal- and informal-sector firms

Ajit Mishra

No wp-2021-71, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: We consider two vertical links between informal- and formal-sector firms and study their implications. In one case, the final products produced by the formal- and informal-sector firms are vertically differentiated in terms of quality, and the size of the informal sector demand is related to the income distribution. Our paper studies the implications of this quality choice for the size of the informal sector. In the other case, the informal-sector firm produces an intermediate good as an input for the formal-sector firm.

Keywords: Informal sector; Income distribution; Supply and demand; Quality of products; Output; Choice (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-com and nep-iue
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Citations: View citations in EconPapers (1)

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Journal Article: What Sustains Informality? A Study of the Interactions between Formal and Informal Sector Firms (2022)
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