Out of the shadows: Classifying economies by the extent and nature of employment in the informal economy

What is it about?

Given the commonality of employment in the informal economy, this paper moves beyond classifying nations by the composition of their formal economies and instead classifies countries by the extent and nature of employment in the informal economy.

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Why is it important?

Analysing ILO data on the size and character of employment in the informal economy in 36 developing economies, the outcome is to reveal a significant correlation between cross-national variations in the degree and intensity of informalisation and cross-national variations in GNP per capita, corruption, poverty, taxation and social contribution levels.

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