{
  "title": "Informality in Paraguay: Macro-Micro Evidence and Policy Implications",
  "publication": "IMF Working Papers, November 24, 2015",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/informality-in-paraguay-macro-micro-evidence-and-policy-implications-43417",
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  "summary": "Paraguay’s economy features a high degree of informality. Based on different estimation approaches, informal activity represents more than half of total employment in Paraguay, a higher rate than those observed in its Latin American and the Caribbean peers.",
  "sections": [
    {
      "heading": "Summary and key findings",
      "content": "- Informal activity represents more than half of total employment in Paraguay.\n- Paraguay’s informality rate is higher than those observed in its Latin American and the Caribbean peers.\n- The informal sector absorbs the most vulnerable workers.\n- Informality affects negatively medium and large firms in the formal sector.\n- The optimal combination of policies to reduce informality is not straightforward and needs to reflect the specific circumstances and objectives of the country."
    },
    {
      "heading": "Determinants of informality",
      "content": "- Theoretical and empirical considerations identify regulations, enforcement policies, and government effectiveness as the ultimate determinants of informality.\n- Paraguay performs weakly in regulations, enforcement policies, and government effectiveness compared to regional peers."
    },
    {
      "heading": "Micro-evidence from surveys",
      "content": "- Household and enterprise surveys are used to characterize the informal sector’s labor absorption and its impact on formal firms.\n- Findings indicate the informal sector primarily absorbs the most vulnerable workers.\n- Medium and large formal firms are negatively affected by the presence of informality."
    },
    {
      "heading": "DSGE model simulations and policy implications",
      "content": "- DSGE model simulations are used to assess policy options to reduce informality.\n- Simulations suggest that the optimal policy mix is context-dependent and not straightforward.\n- Policy design should reflect Paraguay’s specific circumstances and policy objectives."
    },
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      "heading": "Publication and metadata",
      "content": "- By Mauricio Vargas\n- November 24, 2015\n- Pages: 33\n- Volume: 2015\n- Issue: 245\n- Series: Working Paper No. 2015/245\n- DOI: https://doi.org/10.5089/9781513529271.001\n- Stock No: WPIEA2015245\n- ISBN: 9781513529271\n- ISSN: 1018-5941\n- Subject: Economic sectors, Income inequality, Informal economy, Informal employment, Labor, National accounts, Personal income\n- Keywords: Central Asia, enterprise survey, firm, firm size criterion, firms in Paraguay, firms in the service, Income inequality, Informal Economy, Informal employment, informal firm, Labor Regulations, Personal income, Sub-Saharan Africa, Tax System, worker, WP\n\nSource: Informality in Paraguay: Macro-Micro Evidence and Policy Implications, Mauricio Vargas, IMF Working Papers 2015, 245 (2015).\n\n---\n\n Content in this bundle\n\n- Wp15245\n  - Wp15245 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Wp15245 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/informality-in-paraguay-macro-micro-evidence-and-policy-implications-43417"
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    "Authors: Mauricio Vargas",
    "Published: November 24, 2015",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513529271.001",
    "Informal activity represents more than half of total employment in Paraguay.",
    "Paraguay’s informality rate is higher than those observed in its Latin American and the Caribbean peers.",
    "The informal sector absorbs the most vulnerable workers.",
    "Informality affects negatively medium and large firms in the formal sector.",
    "The optimal combination of policies to reduce informality is not straightforward and needs to reflect the specific circumstances and objectives of the country.",
    "Theoretical and empirical considerations identify regulations, enforcement policies, and government effectiveness as the ultimate determinants of informality.",
    "Paraguay performs weakly in regulations, enforcement policies, and government effectiveness compared to regional peers.",
    "Household and enterprise surveys are used to characterize the informal sector’s labor absorption and its impact on formal firms.",
    "Findings indicate the informal sector primarily absorbs the most vulnerable workers.",
    "Medium and large formal firms are negatively affected by the presence of informality.",
    "DSGE model simulations are used to assess policy options to reduce informality.",
    "Simulations suggest that the optimal policy mix is context-dependent and not straightforward.",
    "Policy design should reflect Paraguay’s specific circumstances and policy objectives.",
    "By Mauricio Vargas",
    "November 24, 2015",
    "Pages: 33",
    "Volume: 2015",
    "Issue: 245",
    "Series: Working Paper No. 2015/245",
    "DOI: https://doi.org/10.5089/9781513529271.001",
    "Stock No: WPIEA2015245",
    "ISBN: 9781513529271",
    "ISSN: 1018-5941",
    "Subject: Economic sectors, Income inequality, Informal economy, Informal employment, Labor, National accounts, Personal income",
    "Keywords: Central Asia, enterprise survey, firm, firm size criterion, firms in Paraguay, firms in the service, Income inequality, Informal Economy, Informal employment, informal firm, Labor Regulations, Personal income, Sub-Saharan Africa, Tax System, worker, WP",
    "**Wp15245**"
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