Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7388783 | Structural Change and Economic Dynamics | 2013 | 12 Pages |
Abstract
This study investigates the empirical relationship between the level of urbanization and size of the informal economy using cross-country datasets proxying GDP and employment shares of urban informal sector. Our estimation results indicate that there is an inverted-U relationship between informality and the level of urbanization. That is, the share of the informal sector grows in the early phases of urbanization due to several pull and push factors; however, it tends to fall in the latter phases. We also show that factors like level of taxes, trade openness, and institutional quality tend to affect the size of the informal economy.
Related Topics
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Economics and Econometrics
Authors
Ceyhun Elgin, Cem Oyvat,