Advanced

Informal Employment and the Role of Regional Governance

Jonasson, Erik LU (2011) In Review of Development Economics 15(3). p.429-441
Abstract
The aim of this paper is to provide an explanation to why the degree of informal employment may vary substantially between different regions within a country. In Brazil, 45% of workers in the urban labor force are employed informally. The degree of informal employment, however, varies substantially across regions, with some cities having 20% and others having 80% or more of their labor force in the informal sector. The hypothesis assessed here is that the quality of local governance-or government effectiveness-affects the decisions of workers and businesses as to whether to participate in the formal or the informal sector. The empirical analysis, based on data from 5500 Brazilian municipalities, shows that informal employment is lower in... (More)
The aim of this paper is to provide an explanation to why the degree of informal employment may vary substantially between different regions within a country. In Brazil, 45% of workers in the urban labor force are employed informally. The degree of informal employment, however, varies substantially across regions, with some cities having 20% and others having 80% or more of their labor force in the informal sector. The hypothesis assessed here is that the quality of local governance-or government effectiveness-affects the decisions of workers and businesses as to whether to participate in the formal or the informal sector. The empirical analysis, based on data from 5500 Brazilian municipalities, shows that informal employment is lower in regions with better governance, higher average education, and with a relatively large manufacturing sector. Endogeneity concerns are addressed as part of a series of robustness checks of the results. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
in
Review of Development Economics
volume
15
issue
3
pages
429 - 441
publisher
Wiley-Blackwell
external identifiers
  • wos:000292936100004
  • scopus:79960534092
ISSN
1363-6669
DOI
10.1111/j.1467-9361.2011.00618.x
language
English
LU publication?
yes
id
c7fb817e-17ca-4d46-9942-0995eca14cf7 (old id 2071716)
date added to LUP
2011-08-29 12:40:11
date last changed
2017-11-19 03:58:46
@article{c7fb817e-17ca-4d46-9942-0995eca14cf7,
  abstract     = {The aim of this paper is to provide an explanation to why the degree of informal employment may vary substantially between different regions within a country. In Brazil, 45% of workers in the urban labor force are employed informally. The degree of informal employment, however, varies substantially across regions, with some cities having 20% and others having 80% or more of their labor force in the informal sector. The hypothesis assessed here is that the quality of local governance-or government effectiveness-affects the decisions of workers and businesses as to whether to participate in the formal or the informal sector. The empirical analysis, based on data from 5500 Brazilian municipalities, shows that informal employment is lower in regions with better governance, higher average education, and with a relatively large manufacturing sector. Endogeneity concerns are addressed as part of a series of robustness checks of the results.},
  author       = {Jonasson, Erik},
  issn         = {1363-6669},
  language     = {eng},
  number       = {3},
  pages        = {429--441},
  publisher    = {Wiley-Blackwell},
  series       = {Review of Development Economics},
  title        = {Informal Employment and the Role of Regional Governance},
  url          = {http://dx.doi.org/10.1111/j.1467-9361.2011.00618.x},
  volume       = {15},
  year         = {2011},
}