Informal Economy

  ANALYSIS OF ARTICLE This article is probably the first to focus on Latin American countries. It provides several contributions: 1)       It analyses 18 countries over a significant span of time, 1990 to 2013 2)       Uses electricity per capita as an indicator variable, as done by Schneider 3)       It shows that higher monetary liquidity drives NOE, while higher investments lower NOE. Proposes money supply (MS) and investment / participation of gross capital formation in GDP (I) as causal variables. Interesting to observe that Tax Burden, usually a strong causal variable in several other models, does not have significance on the MIMIC models presented.   SUMMARY OF ARTICLE (provides an overview of the Article, with copy & paste of contents, aiming to summarize its contents).   Using data from the World Bank Development Indicators, the article uses time series from 1990 to ...

  ANALYSIS OF ARTICLE The article develops a MIMIC model for Brazil, back around year 2000, with data from 1994 to 1999. Current data is available till 2018 or later, and an update of the model serve as an updated baseline to compare to new models that we eventually propose.     SUMMARY OF ARTICLE (provides an overview of the Article, with copy & paste of contents, aiming to summarize its contents). The Article initially reviews the literature with focus on the transitioning happening in year 2000. O artigo traz uma boa descrição do MIMIC.   O artigo usa os seguintes dados (variáveis causais e indicadores) para o MIMIC:     Os autores rodam 4 modelos, incluindo ou não as variáveis DTRADE e SALMIN. O melhor modelo escolhido foi o primeiro.     Os modelos mostraram os resultados abaixo, normalizados para 1994.        

ANALYSIS OF ARTICLE The article proposes an interesting perspective lowering the expectations of the NOE to 15-20% based on the efficiency of tax collection in Brazil. It also provides a certain degree of criticism to MIMIC models on NOE estimation, especially regarding the need to calibrate the model with some observed value.     SUMMARY OF ARTICLE (provides an overview of the Article, with copy & paste of contents, aiming to summarize its contents). Instead of using MIMIC, the author uses the monetary approach and the labor market approach. His rationale is based on the availability of data which allows for a more direct measure. Based on the assumption that Brazil’s IRS efficiency is high, the paper concludes that its estimates in the range of 15%-20% are more in line with expectations compared to estimates around 40% obtained by several other authors.   The two methodologies applied by the author on the estimation: -     ...

    ANALYSIS OF ARTICLE Good article applying MIMIC to estimate Portugal’s NOE. It assesses causal and indicator variables, and it’s interesting to assess the usage of certain variables for Portugal, and how they would reflect in a model for Brazil.     SUMMARY OF ARTICLE (provides an overview of the Article, with copy & paste of contents, aiming to summarize its contents).   Causal variables: 1.       Tax burden – most important determinant of tax evasion, as per the literature. a.       Direct taxes and social contributions as percentage of GDP - Positive with NOE. b.       Indirect taxes as percentage of GDP - Positive with NOE. c.        Subsidies and social benefits as a percentage of the disposable income – negative with NOE 2.       Regulation burden – the greater the burden the greater the ince...

    ANALYSIS OF ARTICLE The article provides a good description of MIMIC as a tool to estimate the size of NOE.     SUMMARY OF ARTICLE (provides an overview of the Article, with copy & paste of contents, aiming to summarize its contents).      

  ANALYSIS OF ARTICLE [2021 Dell’Anno] presents a new review of the literature to better establish a general framework to allow the proposal of new policy measures. Informal Economy (IE) is heterogeneous in its nature, and [2021 Dell’Anno] proposes to review the literature on the several definitions of IE and a framework with several ways to theoretically explain informality. This paper will be KEY to the literature review of my thesis.     SUMMARY OF ARTICLE (provides an overview of the Article, with copy & paste of contents, aiming to summarize its contents). On Section 2, [2021 Dell’Anno] builds upon the ILO – ICLS (International Labour Organization, International Conference of Labour Statisticians) to propose a basic framework to define IE.     On Section 3, [2021 Dell’Anno] explores the several approaches to provide IE with a theoretical framework: -           Neoclassical – with micro-...

  ANALYSIS OF ARTICLE Article B2 analyzes the period of 2009-2012 for the introduction of the MEI program in Brazil. Since then, the number of registered firms has grown from ~2.6M MEI firms in 2012 to ~11M firms in 2021. Article B1 shows data from 2009-2015, and present results that show that both (1) reduction of entry cost and (2) reduction of ongoing taxes have impact on MEI growth, while this article B2 with data from 2009-2012 shows that only (2) happens. New data from MEI from 2019 may provide subsidy for further investigation on the application of the policy.     SUMMARY OF ARTICLE   Section 1 (Introduction) – Paper aims to analyze the effects of reducing ongoing formality costs to a firm by estimating the impact of a large-scale program in Brazil called MEI (Individual Micro-Entrepreneur Program – IMP), introduced in 2009. Exogeneity comes from a pre-existing tax framework for micro, small and medium enterprises. Identification hypothesis comes from no indi...

  ANALYSIS OF ARTICLE Article summarizes concepts presented on the OECD Handbook for NOE and provides details on the estimate for Brazil from 2000 to 2009.       Section 1 (Introduction) Authors tailor the NOE definition to encompass the families’ productive activities effected informally or for self-consumption, not formally registered, eventually illegal, or not covered by the official statistics. Brazil’s SNA incorporated new methodologies from 2007 allowing for a better NOE estimation.     Section 2 (The Non-Observed Economy NOE) The article explains how the NOE derives from the SNA (System of National Accounts) limitations on capturing the full information, resulting in an underground statistics composed by undercoverage of areas, lack of data or underdeclared data. SNA improvements over time tend to reduce NOE’s size. It also highlights the importance to have a measure of the NOE not to work with an undersestimated GDP, not o...

  ANALYSIS OF ARTICLE Article provides a summary of the OECD measurements of the Non-Observed Economy, using its categories (1) underground, (2) informal and (3) illegal. NOE estimates compose an important reference to estimating the size of the informal economy.     Section 1 (Definitions and classifications) NOE defined as per “Measuring the Non-Observed Economy – a Handbook (OECD-IMFILO-CIS Stat, 2002)”, comprehending five main areas: underground (productive and legal, avoid taxes), illegal (productive but not legal), informal (productive but unregistered), households for own-final use and statistical underground (productive missed from SNA).     Section 2 (A framework for measurement) The article uses OECD N1-N7 categories are sized to provide an exhaustive measurement of productive activities in the economy.     Section 3 (Estimation Methods applied by national statistical offices) : Authors refer to the “Handbook on Measuring the NOE”, as well ...