The size of the informal economy in Nigeria: a structural equation approach

Roberto Dell'Anno and Omobola Adu

International Journal of Social Economics, 2020, vol. 47, issue 8, 1063-1078

Abstract: Purpose - This paper contributes to the literature concerning the Nigerian informal economy (IE) by estimating its size from 1991 to 2017 and identifying the major causes. Design/methodology/approach - A structural equation approach in the form of the multiple indicators multiple causes (MIMIC) method is used to estimate the size of the Nigerian IE. Findings - The results indicate that vulnerable employment and urban population as a percentage of the total population are the main drivers of the IE in Nigeria. The IE in Nigeria ranges from 38.83% to 57.55% of gross domestic product (GDP). Research limitations/implications - As a result of the empirical challenges in the estimation of the IE, the estimates of Nigeria's IE are considered to be rough estimates. Originality/value - The authors calibrated the MIMIC model with the official estimate of the informal sector published by the Nigerian National Bureau of Statistics (NBS). This was an attempt to combine the national accounting approach, to estimate the size of IE, with the MIMIC approach, and to estimate the trend of informality.

Keywords: Informal economy; Structural equation approach; MIMIC; Nigeria; C30; E26; O17 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

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: https://EconPapers.repec.org/RePEc:eme:ijsepp:ijse-12-2019-0747

DOI: 10.1108/IJSE-12-2019-0747

Access Statistics for this article

International Journal of Social Economics is currently edited by Professor Terence Garrett

More articles in International Journal of Social Economics from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().