Informal Sector Heterogeneity and Income Inequality: Evidence from The Democratic Republic of Congo

Franck M. Adoho and Djeneba Doumbia
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Franck M. Adoho: The World Bank, USA

Journal of Economic Development, 2022, vol. 47, issue 4, 55-77

Abstract: This paper empirically identifies three types of entrepreneurs in the Congolese informal sector, namely top-performers, constrained gazelles and survivalists. Based on logit and fixed effect OLS models, the paper finds that poverty and income inequality are more common among constrained gazelles and survivalists. Results also show that income inequality is explained mainly by educational disparities and lack of credit access among entrepreneurs. The outcomes of a Blinder-Oaxaca decomposition show that the performance of firms is a key factor in explaining differences in income. Moreover, the paper finds that human capital and managerial skills are important engines of performance.

Keywords: Informal Sector; Income Inequality; Poverty; Firm Performance. (search for similar items in EconPapers)
JEL-codes: D21 O12 O17 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Informal sector heterogeneity and income inequality: Evidence from the Democratic Republic of Congo (2017)
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