Publicly Provided Private Goods and Informal Labor Supply

Marcelo Arbex, Flavia Chein (), Isabela Furtado () and Enlinson Mattos
Additional contact information
Flavia Chein: Federal University of Juiz de Fora, Brazil
Isabela Furtado: São Paulo School of Economics, Getulio Vargas Foundation
Authors registered in the RePEc Author Service: Flávia Chein Feres

No 1710, Working Papers from University of Windsor, Department of Economics

Abstract: In this paper we investigate how households time allocations decisions between formal and informal sectors are related to publicly provided goods with and without market substitutes. A simple static public provision model motivates our analysis. Households consume a normal private good and a quasi-private (education) good. Household needs some public utility services to consume the private good and supply labor to formal and informal sectors. Using data from the PNAD (National Household Sample Survey) for the period 2007-2015 we construct indexes of access to three groups of publicly provided goods: (I) basic infrastructure or public utility services, (II) basic education and (III) higher education. Our logit results show a positive effect of access to public education (basic and higher) on the probability of evasion. Differently from public utility services, that affect negatively the probability of evasion, the consumption of these goods present substitute in the private sector. We observe a stronger effect of access to publicly provided basic education comparing with higher education. This result may be related to the different quality of publicly provision of higher and basic education. Tobit results suggest a positive and significant effect only in the case of publicly provided education, i.e., an increase in the access or use of publicly provided education increases the supply of informal labor hours.

Keywords: Education; Public Utility Services; Tax Evasion; Public Provision. (search for similar items in EconPapers)
JEL-codes: H26 H42 J22 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2017-12
New Economics Papers: this item is included in nep-dev, nep-eur and nep-iue
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://web2.uwindsor.ca/economics/RePEc/wis/pdf/1710.pdf First version, 2017 (application/pdf)

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:wis:wpaper:1710

Access Statistics for this paper

More papers in Working Papers from University of Windsor, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Trudeau ().