scholarly journals Optimal Tax Design and Enforcement with an Informal Sector

2009 ◽  
Vol 1 (1) ◽  
pp. 1-27 ◽  
Author(s):  
Robin Boadway ◽  
Motohiro Sato
Keyword(s):  
Informal Sector ◽  
Production Efficiency ◽  
Intermediate Goods ◽  
Formal Sector ◽  
Optimal Tax ◽  
Commodity Tax ◽  
The Government ◽  
Optimal Commodity ◽  
Tax Design

An optimal commodity tax approach is taken to compare trade taxes and VATs when some commodities are produced informally. Trade taxes apply to all imports and exports, including intermediate goods, while the VAT applies only to sales by the formal sector and imports. The VAT achieves production efficiency within the formal sector, but, unlike trade taxes, cannot indirectly tax profits. Making the size of the informal sector endogenous in each regime is potentially decisive. The ability of the government to change the size of the informal sector through costly enforcement may also tip the balance in favor of the VAT. (JEL E26, H21, H25)

Practical Approach for Implementation of the Revised National Policy on Occupational Safety and Health 2020 in the Informal Sector: A Focus on South-South Nigeria

2021 ◽  
Author(s):  
Juwon Adebiyi ◽  
Adebola Bada ◽  
Daniel Maduagwu ◽  
Emem Udoh
Keyword(s):  
Informal Sector ◽  
Occupational Safety ◽  
National Policy ◽  
Competent Authority ◽  
Well Being ◽  
Occupational Safety And Health ◽  
Formal Sector ◽  
Safety And Health ◽  
The Future ◽  
The Government

Abstract The regulation of Occupational Safety and Health (OSH) in Nigeria, which is currently seeing some progress in the formal sector, has been short of impressive in the informal sector of the economy. Con- sidering it is the role of every government to ensure that all sectors of the economy operate in a manner that guarantees and ensures the safety and well-being of its citizens, Article 4 of International Labour Organization (ILO) Convention No. 155- Occupational Safety and Health Convention was ratified by the Government of the Federal Republic of Nigeria (FRN) in 1994, which led to the development of a coherent National Policy on Occupational Safety and Health in 2006. This, inter alia, failed to address the informal sector; hence the Revised National Policy on OSH 2020 was introduced by the Govern- ment, through the office of the Honorable Minister of the Federal Ministry of Labour and Employment, as a framework for bridging the existing gap. In a bid to ensure the success of the Policy document, the Department of Occupational Safety and Health of the Federal Ministry of Labour and Employment was designated the Competent Authority by the Government. This paper takes a look at the stakeholders in the informal sector of the economy, focusing on the south- south part of Nigeria, and identifies some of the challenges hampering the effective implementation of Occupational Safety and Health systems needed for the promotion of safety and health at workplaces. It concludes by providing a practical tool that can be a guide for the policy users, especially in the in- formal sector of the Nigerian economy, in alignment with the second of the three determinants of the future of energy, as captured in the theme for NAICE 2021: "The Future of energy – a trilogy of de- terminants; Climate Change, Public Health, and the Global Oil Market".

New measures will not boost formal-sector jobs in Peru

2021 ◽  
Keyword(s):  
Economic Growth ◽  
Informal Sector ◽  
Mining Industry ◽  
Domestic Demand ◽  
Business Sector ◽  
Formal Sector ◽  
Content Type ◽  
Vaccination Rates ◽  
Speed Up ◽  
The Government

Significance The pandemic appears to have further increased the size of Peru’s large informal sector, in which productivity and remuneration are both low. Earlier economic growth did not feed through into a fall in informality. Impacts The measures announced will put further pressure on the government to raise revenue. Increased taxation is likely to fall on the business sector, including the mining industry. Growth will be generated more by increased external than domestic demand. Vaccination rates are set to speed up.

Outside Options, Coercion, and Wages: Removing the Sugar Coating

2020 ◽  
Vol 130 (630) ◽  
pp. 1678-1714
Author(s):  
Christian Dippel ◽  
Avner Greif ◽  
Daniel Trefler
Keyword(s):  
Informal Sector ◽  
West Indies ◽  
British West Indies ◽  
Formal Sector ◽  
Slave Emancipation ◽  
Unique Data ◽  
Agricultural Employment ◽  
Outside Options ◽  
The Government ◽  
The Impact

Abstract In economies with a large informal sector firms can increase profits by reducing workers’ outside options in that informal sector. We formalise this idea in a simple model of an agricultural economy with plantation owners who lobby the government to enact coercive policies—e.g., the eviction and incarceration of squatting smallhold farmers—that reduce the value to working outside the formal sector. Using unique data for 14 British West Indies ‘sugar islands’ from 1838 (the year of slave emancipation) until 1913, we examine the impact of plantation owners’ power on wages and coercion-related incarceration. To gain identification, we utilise exogenous variation in the strength of the plantation system in the different islands over time. Where planter power declined we see that incarceration rates dropped, and agricultural wages rose, accompanied by a decline in formal agricultural employment.

scholarly journals Is Informal Sector Employment Marginal to Formal Sector Growth?

2012 ◽  
Vol 51 (4II) ◽  
pp. 543-564 ◽  
Author(s):  
Nadia Tahir ◽  
Pervez Tahir
Keyword(s):  
Informal Sector ◽  
Informal Economy ◽  
Labour Force ◽  
Value Added ◽  
The State ◽  
Formal Sector ◽  
Informal Workers ◽  
Role Of The State ◽  
The Government

Pakistan has adopted a neoliberal regime to open the economy to global competition and reduce the role of the state. This directional change brought increased flow of overseas remittances, speculative investment, and consumerism. Consequently, the economy in mid-2000s grew but commodity-producing sector contracted. Public sector spending has been falling, especially on social sectors. There are inadequate provisions for social security and employment based income guarantees. However, this growth and stability was short lived and there is now a fragile state and slowing economy. In the absence of an effective regulatory role of the state, and due to the failure in developing a long-term strategy to harness the labour force potential, there is a huge informal sector existing side by side with the formal economy. Almost 22 million of the employed labour force is earning its livelihood in streets and the government has no record of it. The informal workers can be categorised as self-employed workers and wage workers, doing diversified jobs from petty traders to small producers and from rickshaw driver to shoe shiners. It is difficult to measure the value added contribution of the informal sector in Pakistan. Indirect estimation approaches on the basis of employment and hours worked have been used to estimate the contribution of informal economy. For instance, Idris (2008) estimates the share at 36.8 percent of GNP, which is significant. Arby, Malik and Hanif (2010) measured the size of informal economy in Pakistan through a monetary approach. They find that the size has declined considerably.

Ex-garment female workers: a new entrepreneurial community in Mauritius

2016 ◽  
Vol 10 (1) ◽  
pp. 33-52 ◽  
Author(s):  
Harshana Kasseeah ◽  
Verena Tandrayen-Ragoobur
Keyword(s):  
Informal Sector ◽  
Resource Constraints ◽  
Formal Sector ◽  
Content Type ◽  
Garment Workers ◽  
Female Workers ◽  
Self Employment ◽  
Employed Women ◽  
The Government ◽  
The Individual

Purpose – The purpose of this paper is to investigate the characteristics of the ex-garment workers that have turned to self-employment either in the formal or informal sector in the wake of the termination of the multi-fibre arrangement, which led to job losses. This move has given rise to a new community of entrepreneurs in the Mauritian landscape. Hence, this paper tells a story of women empowerment to disempowerment and finally the struggle for them to get re-empowered. This study also shows that there has been a limit to which self-employment led to empowerment for these women as their incomes are low, and they remain in vulnerable positions. Design/methodology/approach – The study analyses the transformation of a sample of ex-garment workers into new entrepreneurs. The analysis in this paper rests on survey data collected from 92 ex-garment female workers, who are presently self-employed in either the formal or informal sectors, in different parts of Mauritius. Findings – The findings reveal that the self-employed women in the sample, who are also ex-garment female workers, are essentially necessity-driven entrepreneurs. Most of them have only basic primary education and seem to have no other choice than to engage either formally or informally in similar activities, given their prior knowledge and experience in the textile and clothing industries. The authors also find evidence of statistically significant differences across age, marital status and household size between those women in the informal sector compared to those engaged in the formal sector. Research limitations/implications – Resource constraints aside, this study could benefit from a larger sample cutting across many other sub-sectors. So far, the results of this study are only applicable to the specific sample studied. In terms of implications, the study finds that the relevant authorities should come up with targeted policies to help these women and address and alleviate the barriers that they face. Practical implications – This study provides an insight to help explain why a large group of women have gone into self-employment in Mauritius in the past 10 years. The authors find that self-employment has provided an empowerment outlet for these women so that they can financially contribute to their household income. From the policy-making perspective, this implies that it is important for the government to support the activities of these self-employed women with conducive policies. Originality/value – The study helps to advance knowledge on self-employed women in a small vulnerable island economy context. Given that the transition from being employed to unemployed and then the move to self-employment happened in a rather short span of time for these women, the contribution of this study is also to put at the forefront the industrial changes and the individual coping strategies.

Contradictions of “Doing Development”

2009 ◽  
Vol 7 (1) ◽  
Author(s):  
Saumya Chakrabarti
Keyword(s):  
Informal Sector ◽  
The Other ◽  
Formal Sector ◽  
Dual Economy ◽  
Farm Population ◽  
Modern Economy ◽  
The Government ◽  
Symbiotic Relation ◽  
Surplus Population ◽  
Traditional Economy

We construct an economy composed of modern/formal sector and the government and situate it within an exogenously given traditional economy consisting of farm and non-farm activities. The particularities of interactions between formal sector, government and agriculture on one hand and between farm and non-farm sectors on the other are discussed and the departures from the literature are identified. Next, we propose, for accumulation and growth in formal sector a large part of agriculture is modernized and thus there is drain of resources from the traditional economy. This expropriates a sizeable section of non-farm population from the means of consumption and reproduction. Consequently, a vast “surplus population” is created endogenously, which remains outside the domain of capital. This phenomenon points at a fundamental conflict between the modern/formal sector and the traditional nonfarm activities in presence of agricultural-supply-constraint, which was missed out in the orthodox “dual economy” literature proposing only a frictionless transition. Next, following the dictum of “development management” we assume that this “surplus population” is rehabilitated in the newly “discovered” and valorized informal sector. But, contrary to the mainstream position which asserts a symbiotic relation between this informal sector and other sectors of a less-developed-economy we propose that, this promotion of informal activities either generates formal – informal contradiction or engenders a conflict within the non-modern economy in the form of contradiction between the valorized informal sector and the residual petty non-farm activities. Hence, the projection of informal sector as a cushion mitigating unemployment is nothing but a myth.

scholarly journals Evaluation of Investment and Return in Informal Sector: A Case of Chitwan District

2013 ◽  
Vol 28 (1-2) ◽  
pp. 235-252
Author(s):  
Ramchandra Dhakal
Keyword(s):  
Informal Sector ◽  
Informal Economy ◽  
Political Stability ◽  
Formal Sector ◽  
The People ◽  
Determining Factors ◽  
Informal Economies ◽  
Effective Policy ◽  
Males And Females ◽  
The Government

Developing counties, like Nepal is still in tense to maintain the level of political stability, economic growth, development, and employment which are the main issues in one side of the economy and on the other, the majority of the people find shelter in the informal sector in the absence of sluggish growing formal sector. Most of the people are engaged in informal economies that have created varying effects on them in terms of employment and income generations. The latter seems to be determined mainly by the household property, level of literacy, the number of persons employed in any unit and investment. However, there is no apparent differentiation in the income earnings between males and females, the latter seems to be more efficient and articulate in many ways. Income earnings have been higher in the urban location than that of the rural sector. Income level and the determining factors seem to vary among different location and sexes. This study tries to compare the nature and characteristics of informal sector both at national as well as international levels. The government must play effective policy as well as to uplift informal economy for the economic development as a whole. To identify the informal sector properly in Nepal, a national wide survey that covers overall aspects should be considered before taking any step.

Gender And Access To Credit In Micro And Small Enterprises In Mutare, Zimbabwe

2019 ◽  
Vol 118 (10) ◽  
pp. 224-243
Author(s):  
David Damiyano ◽  
Nirmala Dorasamy
Keyword(s):  
Informal Sector ◽  
Economic Activity ◽  
Urban Areas ◽  
Negative Relationship ◽  
Secondary Data ◽  
Ordinary Least Squares ◽  
Formal Sector ◽  
Access To Credit ◽  
The Government ◽  
And Gender

The research study sought to investigate the relationship between access to credit and gender in urban areas of Zimbabwe in which the informal sector is larger than the formal sector. In order to achieve this, the study used the Grameen Theory of micro-lending in Bangladesh, the MC2 theory and ROSCAs theories. The study used secondary data obtained from ZIMSTATS, World Bank, Confederation of Zimbabwe Industries (CZI), the Wisrod website and other publications. E-Views was used to analyze the data using Ordinary Least Squares (OLS) for estimation. The results obtained revealed that gender and age of the client are insignificant in determining accessibility of credit from MFIs. Work attendance, loan repayment ability and profit per day have a positive relationship with access to credit; and firm age has a negative relationship with access to credit in Zimbabwe. In light of these results, the study recommended the government to increase access of credit so as to increase economic activity where there is a large informal sector.  In addition, it also recommended that the government should implement policies which enable the participation of women and also use credit creation multipliers as a way to increase economic activity leading to economic growth.

scholarly journals Community Unionism in Africa: The Case of Mozambique

2011 ◽  
Vol 66 (1) ◽  
pp. 54-73 ◽  
Author(s):  
Pauline Dibben ◽  
Sara Nadin
Keyword(s):  
Informal Sector ◽  
Trade Union ◽  
Informal Economy ◽  
Community Organization ◽  
Formal Sector ◽  
Close Relationship ◽  
Formal Employment ◽  
The Government ◽  
Community Unionism ◽  
The Relationship

Analysis of findings suggests that community unionism is vibrant within Mozambique. Trade union engagement with the main community organization representing the informal economy appears to be a key element of its revitalization strategy; both parties are benefiting from the relationship, and it appears to be sustainable. However, certain questions arise regarding its longer-term viability. Firstly, ASSOTSI represents those working illegally, while the OTM focuses on workers in formal employment. Secondly, OTM has a close relationship with the government due to its socialist past, yet ASSOTSI has a more tentative relationship with the government. Thirdly, ASSOTSI represents only African workers. Furthermore, senior figures in the OTM now seem to be re-considering the value of sustaining an affiliate model that includes all of the informal economy (including both owners and workers), and instead are contemplating setting up a union to represent informal sector workers.This article draws on in-depth research to investigate how community unionism has been employed in Mozambique, an emerging economy in Africa. In doing so, it asks whether engagement with community organizations is characterized by a strategic or piecemeal approach, the degree to which there are mutual benefits for the trade union and the community organization, and whether the relationship is sustainable in the longer term.Against the background of liberalization, privatization and financial crisis, unions face a declining number of core members. In emerging economies such as Mozambique, the formal sector now constitutes around eight percent of the working population, while around seventy-five per cent of the workforce is in the informal sector, with the remainder being unemployed. In many countries, unions have sought to engage these workers through “community unionism.”

scholarly journals Analysis of the behavior in the informal micro-entrepreneur sector in Colombia

2018 ◽  
Vol 10 (1) ◽  
pp. 64-82
Author(s):  
Saul Rick Fernandez Hurtado ◽  
Liliana Marcela Torres Games ◽  
Maria Fernanda Libreros Bonilla ◽  
Luz Angela Martinez Martinez
Keyword(s):  
Informal Sector ◽  
Formal Education ◽  
Descriptive Analysis ◽  
Exploratory Research ◽  
Formal Sector ◽  
Goods And Services ◽  
Education Levels ◽  
Management Positions ◽  
The Government ◽  
Micro Enterprises

Objective: The objective of this research is intended to raise awareness among micro-entrepreneurs, students and society in general about the importance of microenterprises in their economic activity. Method: In order to fulfill the general objective of the study, an exploratory research with data has been applied, with information gathered in a time span involving data collected in conjunction with the direct problems that this contract has with the Colombian society. The study was carried out with a sample of 100 micro enterprises and the informal sector in the research located in Cali (Colombia); the instrument for collecting information on informal micro-enterprises was made through surveys, the study was performed in order to obtain real, measurable and attainable data, resulting in a descriptive analysis using the corresponding variables in the research. Results and Discussion: The study showed that a negative correlation was obtained given that there are a number of microenterprises not legally constituted and, therefore, it was found that these belong to the group of family businesses, which makes it clear that the salary variable is not defined by its business variability.Companies will have greater capacity for goods and services and will eradicate informal enterprises, thus the government will obtain higher taxes, but without abusing them, since if taxes are high, it will lead the companies to evade and are not formalized legally. The financial sector should be more competent to the new micro-entrepreneurs, given that being new to the business system; they require greater support through financial resources and government entities. Conclusion: The environment variable of the informal sector concludes that the phenomenon of informality in the country is predisposed to education levels with the purpose of managing unproductive assets under a formal education managed from the management positions. It is necessary and of vital importance that the State takes measures and solutions relevant to the motivation to include the informal sector within the formal sector.

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