Download or read book Informal Labor and the Efficiency Cost of Social Programs written by François Gerard and published by . This book was released on 2016 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: It is widely believed that the presence of a large informal sector increases the efficiency cost of social programs - transfer and social insurance programs - in developing countries. We evaluate such claims for policies that have been heavily studied in countries with low informality - increases in unemployment insurance (UI) benefits. We introduce informal work opportunities into a canonical model of optimal UI that specifies the typical tradeoff between workers' need for insurance and the efficiency cost from distorting their incentives to return to a formal job. We then combine the model with evidence drawn from comprehensive administrative data to quantify the efficiency cost of increases in potential UI duration in Brazil. We find evidence of behavioral responses to UI incentives, including informality responses. However, because reemployment rates in the formal sector are low to begin with, most beneficiaries would draw the UI benefits absent behavioral responses, and only a fraction of the cost of (longer) UI benefits is due to perverse incentive effects. As a result, the efficiency cost is relatively low, and in fact lower than comparable estimates for the US. We reinforce this finding by showing that the efficiency cost is also lower in labor markets with higher informality within Brazil. This is because formal reemployment rates are even lower in those labor markets absent behavioral responses. In sum, the results go against the conventional wisdom, and indicate that efficiency concerns may even become more relevant as an economy formalizes

Download or read book Informal Labor and the Cost of Social Programs written by François Gerard and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: It is widely believed that the presence of a large informal sector increases the efficiency costs of social programs in developing countries. We develop a simple theoretical model of optimal unemployment insurance (UI) that specifies the efficiency-insurance tradeoff in the presence of informal job opportunities. We then combine the model with evidence drawn from 15 years of uniquely comprehensive administrative data to quantify the social costs of the UI program in Brazil. We first show that exogenous extensions of UI benefits led to falls in formal-sector reemployment rates due to offsetting rises in informal employment. However, because reemployment rates in the formal sector are low, most of the extra benefits were actually received by claimants who did not change their employment behavior. Consequently, only a fraction of the cost of UI extensions was due to perverse incentive effects and the efficiency costs were thus relatively small - only 20% as large as in the US, for example. Using variation in the relative size of the formal sector across different regions and over time in Brazil, we then show that the efficiency costs of UI extensions are actually larger in regions with a larger formal sector. Finally, we show that UI exhaustees have relatively low levels of disposable income, suggesting that the insurance value of longer benefits in Brazil may be sizeable. In sum, the results overturn the conventional wisdom, and indicate that efficiency considerations may in fact become more relevant as the formal sector expands.

Download or read book The Long Shadow of Informality written by Franziska Ohnsorge and published by World Bank Publications. This book was released on 2022-02-09 with total page 397 pages. Available in PDF, EPUB and Kindle. Book excerpt: A large percentage of workers and firms operate in the informal economy, outside the line of sight of governments in emerging market and developing economies. This may hold back the recovery in these economies from the deep recessions caused by the COVID-19 pandemic--unless governments adopt a broad set of policies to address the challenges of widespread informality. This study is the first comprehensive analysis of the extent of informality and its implications for a durable economic recovery and for long-term development. It finds that pervasive informality is associated with significantly weaker economic outcomes--including lower government resources to combat recessions, lower per capita incomes, greater poverty, less financial development, and weaker investment and productivity.

Download or read book Public Sector Debt Statistics written by International Monetary Fund and published by International Monetary Fund. This book was released on 2011-12-08 with total page 230 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global financial crisis of recent years and the associated large fiscal deficits and debt levels that have impacted many countries underscores the importance of reliable and timely government statistics and, more broadly, public sector debt as a critical element in countries fiscal and external sustainability. Public Sector Debt Statistics is the first international guide of its kind, and its primary objectives are to improve the quality and timeliness of key debt statistics and promote a convergence of recording practices to foster international comparability and as a reference for national compilers and users for compiling and disseminating these data. Like other statistical guides published by the IMF, this one was prepared in consultation with countries and international agencies, including the nine organizations of the Inter-Agency Task Force on Finance Statistics (TFFS). The guide's preparation was based on the broad range of experience of our institutions and benefitted from consultation with national compilers of government finance and public sector debt statistics. The guide's concepts are harmonized with those of the System of National Accounts (2008) and the Balance of Payments and International Investment Position Manual, Sixth Edition.

Download or read book Informality written by Guillermo Perry and published by World Bank Publications. This book was released on 2007 with total page 270 pages. Available in PDF, EPUB and Kindle. Book excerpt: Analyzes informality in Latin America, exploring root causes and reasons for and implications of its growth. This book uses two distinct but complementary lenses. It concludes that reducing informality levels and overcoming the "culture of informality" will require actions to increase aggregate productivity in the economy.

Download or read book Social Protection for Informal Workers in Asia written by Sri Wening Handayani and published by Asian Development Bank. This book was released on 2016-12-01 with total page 300 pages. Available in PDF, EPUB and Kindle. Book excerpt: This publication examines the need to expand social protection coverage of the informal sector to support working age productivity, reduce vulnerability, and improve economic opportunity. Case studies from Bangladesh, the People's Republic of China, India, Indonesia, Pakistan, the Philippines, and Thailand offer suggestions to close social protection gaps and recommend policy solutions to create equitable and inclusive social protection programs for informal workers.

Download or read book Good Jobs Bad Jobs No Jobs written by Tony Avirgan and published by . This book was released on 2005 with total page 524 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Globalization and Informal Jobs in Developing Countries written by Marc Bacchetta and published by World Trade Organization. This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: World trade has expanded significantly in recent years, making a major contribution to global growth. Economic growth has not led to a corresponding improvement in working conditions and living standards for many workers. In developing countries, job creation has largely taken place in the informal economy, where around 60 per cent of workers are employed. Most of the workers in the informal economy have almost no job security, low incomes and no social protection, with limited opportunities to benefit from globalization. This study focuses on the relationship between trade And The growth of the informal economy in developing countries. Based on existing academic literature, complemented with new empirical research by the ILO And The WTO, The study discusses how trade reform affects different aspects of the informal economy. it also examines how high rates of informal employment diminish the scope for developing countries to translate trade openness into sustainable long-term growth. The report analyses how well-designed trade and decent-work friendly policies can complement each other so as to promote sustainable development and growing prosperity in developing countries.

Download or read book Designing Labor Market Institutions in Emerging and Developing Economies written by Mr.Romain A Duval and published by International Monetary Fund. This book was released on 2019-05-21 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper discusses theoretical aspects and evidences related to designing labor market institutions in emerging market and developing economies. This note reviews the state of theory and evidence on the design of labor market institutions in a developing economy context and then reviews its consistency with actual labor market advice in a selected set of emerging and developing economies. The focus is mainly on three broad sets of institutions that matter for both workers’ protection and labor market efficiency: employment protection, unemployment insurance and social assistance, minimum wages and collective bargaining. Text mining techniques are used to identify IMF recommendations in these areas in Article IV Reports for 30 emerging and frontier economies over 2005–2016. This note has provided a critical review of the literature on the design of labor market institutions in emerging and developing market economies, and benchmarked the advice featured in IMF recommendations for 30 emerging market and frontier economies against the tentative conclusions from the literature.

Download or read book Informality and Gender Gaps Going Hand in Hand written by Vivian Malta and published by International Monetary Fund. This book was released on 2019-05-23 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: In sub-Saharan Africa women work relatively more in the informal sector than men. Many factors could explain this difference, including women’s lower education levels, legal barriers, social norms and demographic characteristics. Cross-country comparisons indicate strong associations between gender gaps and higher female informality. This paper uses microdata from Senegal to assess the probability of a worker being informal, and our main findings are: (i) in urban areas, being a woman increases this probability by 8.5 percent; (ii) education is usually more relevant for women; (iii) having kids reduces men’s probability of being informal but increases women’s.

Download or read book Essays in Public Economics and Development written by Francois Gerard and published by . This book was released on 2013 with total page 354 pages. Available in PDF, EPUB and Kindle. Book excerpt: The present thesis studies public economics questions in the context of developing countries. In particular, I investigate the impact and design of specific government policies in Brazil. Government interventions may be desirable when unregulated market economies deliver socially inefficient outcomes. Goods and services tend to be under-provided in the presence of imperfect or asymmetric information. Such market failures may be pervasive in the insurance market and prompt governments to provide certain types of insurance directly. Chapters 1 and 2 study social insurance programs, and more specifically unemployment insurance (UI). In contrast, goods and services tend to be over-provided if they generate negative externalities. In recent years, there has been a lot of interest in the negative externalities associated with energy consumption. Chapter 3 studies energy conservation policies, and more specifically residential electricity conservation. In each of the three essays, I develop a simple theoretical framework to guide my empirical analysis. I then estimate the relevant impacts and combine theory and empirics to inform the design of government programs. There is vast literature in public economics (and related fields) on social insurance programs and energy conservation policies. Yet, as for most research in public economics, existing work focuses almost entirely on the context of developed countries. Arguably, social insurance and energy conservation are not first-order priorities in least developed countries. However, these topics are becoming increasingly relevant for developing countries. Most of the growth in energy demand is forecast to come from the developing world, especially for residential consumers. Social insurance programs have been adopted in a growing number of developing countries. Currently some form of UI exists in Algeria, Argentina, Barbados, Brazil, Chile, China, Ecuador, Egypt, Iran, Turkey, Uruguay, Venezuela and Vietnam; Mexico, the Philippines, Sri Lanka, and Thailand have been considering its introduction. Moreover, the severe data constraints that limited empirical work at the intersection of public and development economics are being removed. Today, large administrative datasets and high-quality surveys are available in many developing countries. Importantly, results from more advanced countries are unlikely to translate easily to a developing country context. For instance, the enforcement of social program eligibility is a major challenge in developing countries where the informal sector accounts for a large share of the economy. In Brazil, about half of the employed population works in jobs that escape oversight and monitoring from the government. The presence of a large informal sector is widely believed to increase the efficiency costs of social programs. The main concern is that informal job opportunities exacerbate programs' disincentives to work in the formal sector. The essay in the first chapter (joint work with Gustavo Gonzaga) evaluates such a claim. We begin by developing a simple theoretical model of optimal UI that specifies the efficiency-insurance tradeoff in the presence of informal job opportunities. We then combine the model with evidence drawn from 15 years of uniquely comprehensive administrative data to quantify the social costs of the UI program in Brazil. We first show that exogenous extensions of UI benefits led to falls in formal-sector reemployment rates due to offsetting rises in informal employment. However, because reemployment rates in the formal sector are low, most of the extra benefits were actually received by claimants who did not change their employment behavior. Consequently, only a fraction of the cost of UI extensions was due to perverse incentive effects and the efficiency costs were thus relatively small (only 20% as large as in the US, for example). Using variation in the relative size of the formal sector across different regions and over time in Brazil, we then show that the efficiency costs of UI extensions are actually larger in regions with a larger formal sector. Finally, we show that UI exhaustees have relatively low levels of disposable income, suggesting that the insurance value of longer benefits in Brazil may be sizeable. In sum, the results overturn the conventional wisdom, and indicate that efficiency considerations may in fact become more relevant as the formal sector expands. The findings of this essay have broader implications for our understanding of social policies in developing countries. Many social programs and taxes generate incentives for people to carry out their economic activities informally. For the same reasons as for UI, they are viewed as imposing large efficiency costs in a context of high informality. By going against the conventional wisdom, our results cast doubt on whether efficiency considerations actually limit the expansion of social policies in these cases too. The essay in the second chapter (joint work with Gustavo Gonzaga) follows directly from the above results. Governments face two main informational constraints when implementing any program or regulation (e.g., welfare program). First, there is a screening issue. Government may fail to identify the ex-ante population of interest (e.g., poorest households). Second, there is a monitoring issue. Agents may adopt unobserved behaviors to join or escape the population of interest (e.g., reducing work efforts). The lack of strict monitoring policies for government programs is often considered to be a major issue in developing countries where non-compliance is widespread. Yet, we know surprisingly little about the magnitude of the behavioral responses that we wish to mitigate, relative to the cost of efficient monitoring policies. The Brazilian UI program offers a stark example of a weak monitoring environment. Until recently and for over 20 years, there was absolutely no monitoring of formal job search for UI beneficiaries in Brazil, even though many beneficiaries work informally when drawing UI benefits. In the second chapter, we argue that the results presented in the first chapter may rationalize the complete lack of monitoring in Brazil until 2011. We begin by deriving a theoretical upper bound for the maximum price that a government should be willing to pay per beneficiary to perfectly monitor the formal job search of UI beneficiaries. We show that the bound corresponds to the share of program costs due to behavioral responses. Intuitively, there is little incentive to introduce monitoring if most beneficiaries draw UI benefits without changing their formal reemployment behavior. The overall scope of the monitoring issue is thus limited in Brazil because most beneficiaries would collect UI benefits absent any behavioral response, as shown in the first chapter. Yet, monitoring policies may still be cost-effective if the government is able to target them towards workers with relatively larger behavioral responses. In the empirical analysis, we investigate to what extent the government could use information readily available ex ante (a signal) to identify worker categories with relatively larger behavioral responses. We find that most of the heterogeneity is not easily captured by observable characteristics. Therefore, monitoring policies would be relatively costly even if the government used available signals to target them efficiently. These results motivate future work on the cost-effectiveness of job-search requirements for UI beneficiaries, which have been recently introduced in Brazil. If there is little evidence on the impact of social insurance programs in developing countries, there is almost no evidence on the impact of energy conservation policies. Moreover, results from more advanced countries are also unlikely to translate easily to the context of developing countries. Households in the developing world own fewer appliances and consume much less energy on average. Average monthly residential electricity consumption in Brazil was below 200 kilowatt hours in 2000. Enforcement is also a major challenge. Electricity theft amounts to 15% of the total load for some utilities in Brazil. In the third chapter, I investigate the short- and long-term impacts on residential consumption of the largest electricity conservation program to date. This was an innovative program of economic (fines) and social (conservation appeals) incentives implemented by the Brazilian government in 2001-2002 in response to supply shortages of over 20%. Achieving ambitious energy conservation targets through economic incentives is often considered infeasible. Yet, there is little evidence from ambitious conservation policies. I find that the Brazilian conservation program reduced average electricity consumption per customer by .25 log point during the nine months of the crisis. Importantly, the program induced sizable lumpy adjustments; it reduced consumption by .12 log point until at least 2011. Using individual billing data from three million customers, I show that average effects came from dramatic reductions by most customers. I also provide suggestive evidence that lumpy adjustments came from new habits rather than physical investments. Finally, I structurally estimate a simple model to quantify the role of social incentives and lumpy adjustments. Social incentives amounted to a 1.2 log point increase in electricity tariffs, and may thus be particularly powerful in times of crisis. Importantly, a .6 log point permanent increase in tariffs would have been necessary to achieve the observed consumption levels during and after the crisis absent any lumpy adjustment. The possibility of triggering lumpy adjustments may thus substantially reduce the incentives necessary to achieve ambitious energy conservation targets. Beyond the specific issues it addresses, I hope that this dissertation will help convince senior and junior scholars alike of the relevance.

Download or read book Informal Employment in Emerging and Transition Economies written by Solomon W. Polachek and published by Emerald Group Publishing. This book was released on 2012-04-17 with total page 300 pages. Available in PDF, EPUB and Kindle. Book excerpt: Informality and informal employment are wide-spread and growing phenomena in all regions of the world, particularly in low and middle income economies. This volume sheds light on the incidence and persistence of informality and the role of institutions and government regulations, and offers insights into issues such as how labor and tax regulations

Download or read book Key Policies for Addressing the Social Determinants of Health and Health Inequities written by Centers of Disease Control and published by World Health Organization. This book was released on 2017-09-27 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt: Evidence indicates that actions within four main themes (early child development fair employment and decent work social protection and the living environment) are likely to have the greatest impact on the social determinants of health and health inequities. A systematic search and analysis of recommendations and policy guidelines from intergovernmental organizations and international bodies identified practical policy options for action on social determinants within these four themes. Policy options focused on early childhood education and care; child poverty; investment strategies for an inclusive economy; active labour market programmes; working conditions; social cash transfers; affordable housing; and planning and regulatory mechanisms to improve air quality and mitigate climate change. Applying combinations of these policy options alongside effective governance for health equity should enable WHO European Region Member States to reduce health inequities and synergize efforts to achieve the United Nations Sustainable Development Goals.

Download or read book The Informal Economy in Developing Countries written by Jean-Pierre Cling and published by Routledge. This book was released on 2014-08-21 with total page 390 pages. Available in PDF, EPUB and Kindle. Book excerpt: Informality is ubiquitous in most developing countries. Understanding the informal economy is therefore of utmost importance from a political, economic and social point of view. Paradoxically, despite its economic importance, knowledge is extremely limited regarding the informal economy. It remains largely unrecognized by researchers, is neglected by politicians, and is even negatively perceived as it is meant to disappear with development. This book aims to amend this situation by presenting recent high level research which studies the informal sector and informal employment. Fresh research into this subject is presented through empirical analysis which covers Asia, Africa and Latin America. Each chapter relies on data and a detailed knowledge of the context of the countries studied in order to question the dominant schools of thought on the origins and causes of informality. The results provide interesting insights into the constraints faced by informal workers, the dynamics of the informal economy and its link with poverty issues. On the basis of the evidences provided by results adequate policies could be defined to address informality issues. The principal characteristics of the informal sector testify to some profound similarities between developing countries: low qualifications and the precariousness of jobs, mediocre incomes and working conditions, atomization of production units and lack of articulation with the formal economy, etc. This general statement does not contradict the observation that there is a high level of heterogeneity in the sector and in informal employment within each country, confirmed by several chapters in this work. In the absence of a sufficient number of job creations, the informal sector essentially constitutes a refuge for workers seeking and is here to stay in the short and medium term, even in emerging countries.

Download or read book Global Economic Prospects January 2019 written by World Bank Group and published by World Bank Publications. This book was released on 2019-02-12 with total page 470 pages. Available in PDF, EPUB and Kindle. Book excerpt: The outlook for the global economy has darkened. Global financing conditions have tightened, industrial production has moderated, trade tensions have intensified, and some large emerging market and developing economies have experienced significant financial market stress. Faced with these headwinds, the recovery in emerging market and developing economies has lost momentum. Downside risks have become more acute and include the possibility of disorderly financial market movements and an escalation of trade disputes. Debt vulnerabilities in emerging market and developing economies, particularly low-income countries, have increased. More frequent severe weather events would raise the possibility of large swings in international food prices, which could deepen poverty. In this difficult environment, it is of paramount importance for emerging market and developing economies to rebuild policy buffers while laying a stronger foundation for future growth by boosting human capital, promoting trade integration, and addressing the challenges associated with informality,

Download or read book Informal Economy Wage Goods and the Changing Patterns of Accumulation Under Structural Adjustment written by Marc Wuyts and published by Economic and Social Research Foundation. This book was released on 1998 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Education and Training for the Informal Sector written by Simon McGrath and published by . This book was released on 1997 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: