Measuring the Informal Economy in Latin America and the Caribbean

Author/Editor:

Guillermo Javier Vuletin

Publication Date:

April 1, 2008

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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.

Series:

Working Paper No. 2008/102

Subject:

Agricultural sector Currencies Informal economy Labor Tax incidence

English

Publication Date:

April 1, 2008

ISBN/ISSN:

9781451869637/1018-5941

Stock No:

WPIEA2008102

Pages:

29

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