Sarra Ben Yahmed, Pamela Bombarda, 24 June 2018

Trade liberalisation has been shown to affect formality rates in labour markets. This column exploits the Mexican trade liberalisation episode in the 1990s, to explore the labour market impact of reductions in import tariffs across gender and sectors. Within disaggregated tradable sectors, the probability of working formally has increased for both men and women in Mexico. Considering regional adjustments,exposure to trade liberalisation has had different effects across genders and tradable versus non-tradable sectors.

Sergei Guriev, Biagio Speciale, Michele Tuccio, 13 September 2016

A common explanation for the growth in unemployment in southern Europe after the Great Recession is lack of flexibility in over-regulated labour markets. This column examines wage adjustment in regulated and unregulated labour markets in Italy during the recent crisis. Using data on immigrant workers, it shows that before the crisis wages in the formal and informal sectors moved in parallel. During the crisis, however, formal wages did not adjust downwards, while informal labour wages did. Greater flexibility in wages in the formal market could slow the decline in employment.

Ceyhun Elgin, Oguz Oztunali, 10 May 2012

Shadow economies – sometimes called the black market or informal economy – exist in every country. But how big are they? This column presents some new approaches to estimating their size and uses them to compare shadow economies across rich and poor countries over the last 60 years.

Maurizio Bovi, 10 November 2010

Workers across Europe are suffering from what economists are calling a dual labour market. One side with permanent jobs, sheltered from risk, leaving the other side – the temporary workers – exposed to the vagaries of the market. This column argues that policymakers need to consider a third dimension – the shadow labour market. If they do not, the column warns that policymakers could make things far worse.

Thorsten Beck, Chen Lin, Yue Ma, 13 October 2010

Can financial sector reform help bring informal firms into the formal sector? This column examines over 22,000 firms from 43 countries. Firms in countries with a credit registry are 20% less likely to evade taxes, and the tax evasion ratio in such countries is 11% lower.

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CEPR Policy Research