On the Effects of Formalization on Taxes and Wages: Panel Evidence from Vietnam

Amadou Boly

No wp-2015-042, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Based on a unique panel dataset consisting of both formal and informal firms surveyed every other year from 2005 to 2013, this paper explores the benefits of formalization to the government and firm employees in Vietnam. We find that formalization benefits the government by increasing the amount and the likelihood of tax payments. Formalization also increases the wage level paid by firms that shift out of the informal sector, as well as the share of wages in value added.

Keywords: Factor proportions; Informal sector; Taxation; Wages (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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