Economics at your fingertips  

Does manager education play a role in the productivity of informal firms in developing economies? Evidence from firm‐level surveys

Mohammad Amin and Asif Islam

Review of Development Economics, 2022, vol. 26, issue 2, 962-984

Abstract: The informal sector is dominant in developing economies, and the vast majority of the poor rely on it. There is much to learn about informal firms—the “businesses of the poor”—as little is known about the drivers of their performance. The present paper attempts to fill this gap in the literature by analyzing how labor productivity of informal firms in developing countries depends on the level of education of the manager or the main decision‐maker of the firm. Using survey data for 3,854 informal or unregistered firms in 18 countries in Africa, Asia, and Latin America, we find that labor productivity is 28% to 33% higher when the manager has secondary or higher education versus only primary education or no education. The finding is robust to various robustness checks including parametric and semi‐parametric specifications and confirmed using instrumental variables estimation.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)

Related works:
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:

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1363-6669

Access Statistics for this article

Review of Development Economics is currently edited by E. Kwan Choi

More articles in Review of Development Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

Page updated 2024-02-06
Handle: RePEc:bla:rdevec:v:26:y:2022:i:2:p:962-984