Informality: Exit and Exclusion

Guillermo E. Perry, William Maloney, Omar Arias, Pablo Fajnzylber, Andrew D. Mason and Jaime Saavedra

No 6730 in World Bank Publications - Books from The World Bank Group

Abstract: Informality: exit and exclusion analyzes informality in Latin America, exploring root causes and reasons for and implications of its growth. The authors use two distinct but complementary lenses: informality driven by exclusion from state benefits or the circuits of the modern economy, and driven by voluntary 'exit' decisions resulting from private cost-benefit calculations that lead workers and firms to opt out of formal institutions. They find both lenses have considerable explanatory power to understand the causes and consequences of informality in the region. Informality: exit and exclusion concludes that reducing informality levels and overcoming the 'culture of informality' will require actions to increase aggregate productivity in the economy, reform poorly designed regulations and social policies, and increase the legitimacy of the state by improving the quality and fairness of state institutions and policies. Although the study focuses on Latin America, its analysis, approach, and conclusions are relevant for all developing countries.

Keywords: Social; Protections; and; Labor; -; Labor; Markets; Banks; and; Banking; Reform; Social; Protections; and; Labor; -; Labor; Standards; Work; and; Working; Conditions; Tertiary; Education; Finance; and; Financial; Sector; Development; Education (search for similar items in EconPapers)
Date: 2007
ISBN: 0-8213-7092-8
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (492)

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