Measuring the Informal Economy in Latin America and the Caribbean

Guillermo Vuletin

No 2008/102, IMF Working Papers from International Monetary Fund

Abstract: This paper estimates the size of the informal economy for 32 mainly Latin American and Caribbean countries in the early 2000s. Using a structural equation modeling approach, we find that a stringent tax system and regulatory environment, higher inflation, and dominance of the agriculture sector are key factors in determining the size of the informal economy. The results also confirm that a higher degree of informality reduces labor unionization, the number of contributors to social security schemes, and enrollment rates in education.

Keywords: WP; informal economy share; tax burden (search for similar items in EconPapers)
Pages: 29
Date: 2008-04-01
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Citations: View citations in EconPapers (46)

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