Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259987 
Authors: 
Year of Publication: 
2011
Series/Report no.: 
Working Paper No. 2010:13
Publisher: 
Lund University, School of Economics and Management, Department of Economics, Lund
Abstract: 
This paper 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 sector. 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 informal employment is lower in regions with better governance and higher average education.
Subjects: 
informal employment
government effectiveness
Latin America
Brazil
JEL: 
J21
J24
O17
R23
Document Type: 
Working Paper

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