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I evaluate how the tax reform of 2012 reduced informality in Colombia both theoretically and empirically. Theoretically, I develop a labor market model and obtain simulations indicating that the reform should reduce informality significantly. Empirically, I obtain difference-in-difference estimates from two household surveys. Estimates from the repeated cross-sections data indicate small, short-term effects and large long-term effects. Estimates from the household survey panel data are in line with these results. I also simulate difference-in-difference estimates with different combinations of changes in payroll taxes and enforcement indicating that large improvements would have been needed to obtain the corresponding econometric estimates.

Informality is a growing phenomenon in the developing and transition country labor market context. In particular, it is noticeable that working in an informal employment relationship is often not temporary. The degree of persistence of informality in the labor market might be due to different sources: structural state dependence due to past informality experiences and spurious state dependence due to time-invariant unobserved individual effects, which can alter the propensity of being in the informal sector independently from actual informality experiences. The purpose of our paper is to study the dynamics of informality using a genuine panel data set in the Ukrainian labor market. By estimating a dynamic panel data probit model with endogenous initial conditions, we find a highly significant degree of persistence due to previous informality experiences. This result implies that policies attempting to reduce current levels of informality may have a long-lasting effect on the labor market.

The paper validates the threshold argument in the informality–poverty nexus. Recent literature and policy have argued the existence of a threshold in the relationship.

The study adopts dynamic panel threshold analysis, estimated within the framework of system Generalized Method of Moments (SGMM) to control for endogeneity and simultaneity. Data from 40 selected sub-Saharan African countries between 1991 and 2018 are used for the study.

Empirical results confirm the existence of an average threshold of 31% share of informality in GDP. Also, the paper finds that threshold of informality that addresses mild and severe poverty varies between 24.32 and 36.75%.

The work is limited to African economies. Evidence from other emerging and developed economies is suggested for further research.

Overall, the empirical results indicate a threshold in the informality–poverty nexus. Therefore, an excessive informality level does not benefit the African growth process. Policymakers and governments are advised to operate within the bounds of the threshold of informality that reduces poverty and improve the African economic growth process.

The paper is the first study to provide empirical findings on the nonlinear and threshold argument in the informality–poverty nexus, as far as the authors know.

Enterprise resource planning (ERP) systems are limited due to their operation around a fixed design production process and a fixed lead time to production plan and purchasing plan. The purpose of this paper is to define the concept of informality and to describe the notion of a system combining informality and ERP systems, based on empirical research from four manufacturing case studies.

The case studies present a range of applications of ERP and are analysed in terms of the three characteristics of informality, namely, organisation structure, communication method and leadership approach.

The findings suggest that systems consisting of informality in combination with ERP systems can elicit knowledge from frontline workers leading to timely improvements in the system. This is achieved by allowing users to modify work procedures or production orders, and to support collaborative working among all employees. However it was found that informality is not required for manufacturers with a relatively stable environment who can deal with uncertainty with a proactive strategy.

This study was carried out in China, with four companies as unit of analysis. Future work can help to extend this study across countries.

The use of Four dimensions of informality that relate to manufacturers implementing ERP are defined as “technology in practice”, “user flexibility”, “trusted human networks” and “positive reaction to uncertainty”. This is a new construct not applied before to ERP implementations.

The purpose of this study is to explain how and why firms configure copyright practices when confronted with state-sanctioned laws and informal customs projected by local ethnic or religious communities.

A multi-case inductive study of four film-producing organizations within the Nigerian film industry (i.e. Nollywood) was conducted. Specifically considered were firms that started their operations around the same time with similar founding conditions, experiences, resources and technical competencies. Field observations and multiple rounds of in-depth interviews were conducted to achieve the research objectives.

The study found that firms adopted dominant or hybrid configurations when interacting with informality and formality. Dominant configurations represent the exclusive adoption of informal copyright practices while hybrid configurations refer to the blended use of informal and formal copyright practices. The second set of findings revealed that each firm’s strategic intent affected the type of interactional configuration that unfolded in the firm. Specifically, firms with social intents tended to adopt dominant configurations, whereas firms with socio-economic intents tended to adopt hybrid configurations.

The study implies that firms may profit from strategically focusing on when and in what circumstances to adopt informality. Strategic intents that blend social and economic rationales may secure more positive interactive outcomes from internal and external stakeholders promoting formality and informality.

This study highlights the fact that firms embedded in local religious and ethnic communities use organizational practices to solve social and institutional problems of their members. The copyright practices of these organizations encourage apprenticeship, youth empowerment and entrepreneurship in Nigeria.

To the best of the authors’ knowledge, this is the first study that goes beyond macro-level analysis to investigate the interactional dynamics between formality and informality at the firm, community, and state levels. The study is also first of its kind to use copyright practices as an analytical lens to explore the interaction between informality and formality.

The purpose of this paper is to suggest that informal practices and institutions of post-Soviet countries differ from informality in other post-socialist regions and, therefore, proposes categorizing it as “post-Soviet informality” – a composite definition that extends beyond the concept of “informal economy” and encompasses, along with economic activities, social and political spheres.

The arguments of the paper are based on a comprehensive analysis of secondary sources.

This paper shows that, owing to the effects of antecedent regime’s legacies and the problems of post-communist transition, for the proper analysis of informality in post-Soviet countries it needs to be based on an own concept.

This study, in contrast to the existing literature on informality in post-communist spaces, specifically focuses on the informal sphere of post-Soviet countries, suggesting that the informal institutions and practices thriving across the vast post-Soviet space not only differ from the informal spheres elsewhere in the world, but also from informality in other post-communist regions.

The “unplannable” is a welcomed exception to the formal order of urban planning. This opinion article explores some examples of informal urbanism and discusses its ambiguous relationship to public space and unplanned activities in the city. The informal sector offers important lessons about the adaptive use of space and its social role. The article examines the ways specific groups appropriate informal spaces and how this can add to a city’s entrepreneurship and success. The characteristics of informal, interstitial spaces within the contemporary city, and the numerous creative ways in which these temporarily used spaces are appropriated, challenge the prevalent critical discourse about our understanding of authorised public space, formal place-making and social order within the city in relation to these informal spaces.

The text discusses various cases from Chile, the US and China that illustrate the dilemma of the relationship between informality and public/private space today. One could say that informality is a deregulated self-help system that redefines relationships with the formal. Temporary or permanent spatial appropriation has behavioural, economic and cultural dimensions, and forms of the informalare not always immediately obvious: they are not mentioned in building codes and can often be subversive or unexpected, emerging in the grey area between legal and illegal activities.

In the years 2003–2008, the Russian economy experienced a period of strong and sustained growth, which was accompanied by large worker turnover and rising informality. We investigate whether the burden of informality falls disproportionately on job separators (displaced workers and quitters) in the Russian labor market in the form of informal employment and undeclared wages in formal jobs. We also pursue the issues whether displaced workers experience more involuntary informal employment than workers who quit and whether informal employment persists. We find a strong positive link between separations and informal employment as well as shares of undeclared wages in formal jobs. Our results also show that displacement entraps some of the workers in involuntary informal employment. Those who quit, in turn, experience voluntary informality for the most part, but there seems a minority of quitting workers who end up in involuntary informal jobs. This scenario does not fall on all separators but predominantly on those with low human capital. Finally, informal employment is indeed persistent since separating from an informal job considerably raises the probability to be informal in the subsequent job.

Poverty and informal employment are often regarded as correlated phenomena. Many empirical studies have shown that informal employment has a causal impact on household poverty, mainly through low wages. Yet other studies focus on the reverse causality from poverty to informality, arising from a range of constraints that poverty poses to jobholders. Only recently have empirical researchers tried to study the simultaneous two-way relationship between poverty and informality. However, existing studies have relied upon cross-sectional data and static econometric models.

This chapter takes the next step and studies the dynamics of poverty and informality using longitudinal data. Our empirical analysis is based on a bivariate dynamic random-effect probit model and recent panel data from Argentina. The method used provides a means of assessing the persistence over time of poverty and informal employment at the individual level, while controlling for both observed and unobserved determinants of the two processes. The results show that both poverty and informal employment are highly persistent processes. Moreover, positive spillover effects are found from past poverty on current informal employment and from past informality to current poverty status, corroborating the view that the two processes are also shaped by interrelated dynamics in segmented labor markets.

We study the impact of tax and minimum wage reforms on the incidence of informality. To gauge the incidence of informality, we use measures of the extent of tax evasion, the extent of minimum wage noncompliance, and the size of the informal workforce. Our approach allows us to examine (i) the distinction between determinants of firm-level reported wage distribution and actual wage distribution, (ii) the complementarity of tax and minimum wage enforcement, (iii) the impact that a minimum wage reform has on tax and minimum wage compliance, and (iv) the impact that a tax policy reform has on tax and minimum wage compliance. We conclude with the design of optimal minimum wage and tax policies (even in the complete absence of minimum wage enforcement). We do so based on two objectives derived from popular concerns associated with an unchecked expansion of informality: tax revenue maximization, and poverty alleviation among workers.