Shedding light on the shadows of informality: A meta-analysis of formalization interventions targeted at informal firms
Binyam Afewerk Demena and
Natascha Wagner ()
Labour Economics, 2020, vol. 67, issue C
Governments and policymakers promote formalization through various interventions ranging from simplifying registration procedures to increasing law enforcement. Despite these efforts, not much is known about the effects of interventions aiming at formalizing informal firms. This meta-analysis examines the empirical literature on the impact of such formalization interventions. We systematically assessed the literature on the impact of formalization policies resulting in 842 estimates from 27 studies conducted by 49 researchers and published until June 2019. We analysed the meta-impact of (i) cost, (ii) benefit and (iii) enforcement policy interventions and verified whether the resulting outcomes are influenced by the type of data, econometric approach and specification, country characteristics, as well as publication bias. Overall, we find no evidence for increased formalization associated with the so far implemented interventions. There is some indication that policies increasing the benefits after formalization are associated with increased formalization rates but the evidence base is thin suggesting that further piloting and experimenting is needed to achieve large-scale formalization of the informal economy.
Keywords: Meta-regression analysis; Informal enterprises; Formalization; Developing countries (search for similar items in EconPapers)
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)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:67:y:2020:i:c:s0927537120301299
Access Statistics for this article
Labour Economics is currently edited by A. Ichino
More articles in Labour Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().