{
  "title": "The Informal Economy in Sub-Saharan Africa: Size and Determinants",
  "publication": "IMF Working Papers, July 10, 2017",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2017/07/10/the-informal-economy-in-sub-saharan-africa-size-and-determinants-45017",
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  "summary": "The multiple indicator-multiple cause (MIMIC) method is a well-established tool for measuring informal economic activity. However, it has been criticized because GDP is used both as a cause and indicator variable.",
  "sections": [
    {
      "heading": "Methodology",
      "content": "- Uses the multiple indicator-multiple cause (MIMIC) method as the established tool for measuring informal economic activity and notes criticism that \"GDP is used both as a cause and indicator variable.\"\n- Applies for the first time the light intensity approach (instead of GDP) to address the MIMIC critique.\n- Uses the Predictive Mean Matching (PMM) method to estimate the size of the informal economy for Sub-Saharan African countries over 24 years."
    },
    {
      "heading": "Key findings",
      "content": "- Results suggest that informal economy in Sub-Saharan Africa \"remains among the largest in the world.\"\n- The share of the informal economy \"has been very gradually declining.\"\n- Finds significant heterogeneity across countries:\n  - Informality ranging from a low of \"20 to 25 percent\" in Mauritius, South Africa and Namibia.\n  - Informality ranging to a high of \"50 to 65 percent\" in Benin, Tanzania and Nigeria."
    },
    {
      "heading": "Subject and keywords (as listed)",
      "content": "- Subject: Currencies, Economic sectors, Informal economy, Labor, Labor force participation, Money, National accounts, Personal income, Unemployment rate\n- Keywords: Currencies, economic activity, estimation, GDP, Informal economy, informal economy activity, informal economy growth, Labor force participation, mimic approach, MIMIC estimation methods, model estimation result, Personal income, phrase informal economy, Sub-Saharan Africa, Unemployment rate, WP\n\n---\n\n Content in this bundle\n\n- The Informal Economy in Sub-Saharan Africa: Size and Determinants, WP/17/156, July 2017\n  - The Informal Economy in Sub-Saharan Africa: Size and Determinants, WP/17/156, July 2017 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - The Informal Economy in Sub-Saharan Africa: Size and Determinants, WP/17/156, July 2017 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2017/07/10/the-informal-economy-in-sub-saharan-africa-size-and-determinants-45017"
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    "Authors: Leandro Medina, Andrew W Jonelis, Mehmet Cangul",
    "Published: July 10, 2017",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484305942.001",
    "Uses the multiple indicator-multiple cause (MIMIC) method as the established tool for measuring informal economic activity and notes criticism that \"GDP is used both as a cause and indicator variable.\"",
    "Applies for the first time the light intensity approach (instead of GDP) to address the MIMIC critique.",
    "Uses the Predictive Mean Matching (PMM) method to estimate the size of the informal economy for Sub-Saharan African countries over 24 years.",
    "Results suggest that informal economy in Sub-Saharan Africa \"remains among the largest in the world.\"",
    "The share of the informal economy \"has been very gradually declining.\"",
    "Finds significant heterogeneity across countries:",
    "Subject: Currencies, Economic sectors, Informal economy, Labor, Labor force participation, Money, National accounts, Personal income, Unemployment rate",
    "Keywords: Currencies, economic activity, estimation, GDP, Informal economy, informal economy activity, informal economy growth, Labor force participation, mimic approach, MIMIC estimation methods, model estimation result, Personal income, phrase informal economy, Sub-Saharan Africa, Unemployment rate, WP",
    "**The Informal Economy in Sub-Saharan Africa: Size and Determinants, WP/17/156, July 2017**"
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