Trade Liberalisation and Informality: New stylized facts

Norbert M. Fiess and Marco Fugazza ()

Working Papers from Business School - Economics, University of Glasgow

Abstract: The relationship between trade liberalisation and informal activity has not received the attention, whether theoretical or empirical, that it may deserve. The conventional view poses that trade liberalisation would cause a rise in informality. This paper uses three different data sets to assess the sign of the relationship. Empirical results provide a mixed picture. Macro founded data tend to produce results supporting the conventional view. Micro founded data do not. Empirical results also suggest that while informal output increases with deeper trade liberalisation, informal employment falls.

Keywords: Informal Sector; Trade Liberalisation; Cross-sectional Analysis; Time Series Analysis; Panel Analysis (search for similar items in EconPapers)
JEL-codes: F13 F16 O17 C23 (search for similar items in EconPapers)
Date: 2008-12
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Related works:
Working Paper: TRADE LIBERALIZATION AND INFORMALITY: NEW STYLIZED FACTS (2010)
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Persistent link: http://EconPapers.repec.org/RePEc:gla:glaewp:2008_34

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