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Government Effectiveness and Regional Variation in Informal Employment

Erik Jonasson ()

No 2010:13, Working Papers from Lund University, Department of Economics

Abstract: This paper analyses the role of government effectiveness in the determination of informal employment. A theoretical model is developed, in which local governance and worker skill level are assumed to influence the decision of the worker whether to seek employment in the formal or informal sector. The model is assessed empirically using data from Brazil, where almost half of the urban labour force is employed informally. The empirical analysis supports the predictions of the model and suggests that informal employment is lower in regions with better governance and higher average education.

Keywords: informal employment; government effectiveness; Latin America; Brazil (search for similar items in EconPapers)
JEL-codes: J21 J24 O17 R23 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2010-10-26, Revised 2011-03-31
New Economics Papers: this item is included in nep-lab, nep-soc and nep-ure
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Forthcoming as Jonasson, Erik, 'Government Effectiveness and Regional Variation in Informal Employment' in Journal of Development Studies.

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http://project.nek.lu.se/publications/workpap/Papers/WP10_13.pdf (application/pdf)

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Journal Article: Government Effectiveness and Regional Variation in Informal Employment (2012) Downloads
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