H1- [2021 Dellano] inequality-and-informality-in-transition-and-emerging-countries

 




ANALYSIS OF ARTICLE

Empirical analysis on the correlation between informality and inequality is hard, as both estimates are not accurate and can be independently biased.

The article proposes a general framework with the transmission channels, based on the existing literature on the topic.

 

 

SUMMARY OF ARTICLE

Three groups of Channels in the literature between inequality and informality:

1)      the direct effects of inequality on informality through capital accumulation and institutions.

2)      the indirect effect of changes in inequality through the formal economy.

3)      the feedback effects of informality on income distribution

 

The article provides a detailed analysis of the channels identified in the literature, as well as the economic intuition for each channel. Detailed channels are identified in the picture below.







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