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Government Effectiveness and Regional Variation in Informal Employment

Author

  • Erik Jonasson

Summary, in English

Abstract in Undetermined
This article analyses the role of government effectiveness in the determination of informal employment. A theoretical model is developed, in which local governance and worker skill level are assumed to influence the decision of the worker whether to seek employment in the formal or informal sectors. The model is assessed empirically using data from Brazil, where almost half of the urban labour force is employed informally. The empirical analysis supports the predictions of the model and suggests that the probability of a worker being employed informally is lower in regions with better governance and higher average education.

Publishing year

2012

Language

English

Pages

481-497

Publication/Series

Journal of Development Studies

Volume

48

Issue

4

Document type

Journal article

Publisher

Taylor & Francis

Topic

  • Economics

Status

Published

ISBN/ISSN/Other

  • ISSN: 0022-0388