Informal Economy

  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.

  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-...