Elsevier

World Development

Volume 17, Issue 3, March 1989, Pages 351-355
World Development

A theoretical analysis of the informal sector

https://doi.org/10.1016/0305-750X(89)90208-8Get rights and content

Abstract

In this paper, we present a theoretical framework of an economy which has an informal sector. The differences between the formal and the informal sector together with their linkages form the basis of our analysis. We show that the informal sector can expand in terms of output and employment even when the formal sector contracts.

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