We extend the theory of the optimal redistributive taxation to economies with an informal labor market. The optimal tax formula contains two new terms capturing reported income responses of informal workers on an intensive ...

In the literature on development and modernization, it has been expected that with economic growth and a consequent increase in per capita income, the dualism between the formal and informal ...

This paper evaluates the impact of a VAT rate increase on bank account ownershipby Mexican micro-entrepreneurs considering informality as the main channel of this effect. Using two rounds of a ...

Micro firmscan be seen as potential growth drivers, as they are usually related to entrepreneurship, a relatively high share of micro firms can also be a sign of an underdeveloped productive ...

Our paper aims at unveiling how much the monetary policy shall deviate from the zero-inflation allocation in an economy with a large informal sector. A first insight is thatinformality amplifies ...

How do natural resource windfalls affect the quality of politicalcandidates? Existing scholarship argues that non-tax public revenuehas a negative effect on the characteristics of candidates because ...

We undertake an extended discussion of the latest developments about the existingand newestimation methods of the shadow economy. New results on the shadow economy for 158 countries all over ...

Due to small firm sizes and inter-linkages between household and business finances, small-scale entrepreneurs in developing countries are inherently vulnerable to temporary and per-manent income ...

What forces the businesses to hidein the shadows? There are two competing theories trying to explainthis behavior, one identifying high tax burdenand the other corruptionas the main force.As ...

We examine the role that informal sector employment plays in poverty reduction using data from the National Income Dynamics Study (NIDS). Using a Shapley decomposition approach, wefind that ...