Measuring the Informal Economy in Latin America and the Caribbean
April 1, 2008
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Summary
This paper estimates the size of the informal economy for 32 mainly Latin American and Caribbean countries in the early 2000s. Using a structural equation modeling approach, we find that a stringent tax system and regulatory environment, higher inflation, and dominance of the agriculture sector are key factors in determining the size of the informal economy. The results also confirm that a higher degree of informality reduces labor unionization, the number of contributors to social security schemes, and enrollment rates in education.
Subject: Agricultural sector, Currencies, Informal economy, Labor, Tax incidence
Keywords: informal economy share, tax burden, WP
Pages:
29
Volume:
2008
DOI:
Issue:
102
Series:
Working Paper No. 2008/102
Stock No:
WPIEA2008102
ISBN:
9781451869637
ISSN:
1018-5941
