The informal sector and the macroeconomy: A computable general equilibrium approach for Peru
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Cited by (18)
Effects of credit and labor constraints on microenterprises and the unintended impact of changes in household endowments: Use of threshold estimation to detect heterogeneity
2023, Quarterly Review of Economics and FinanceCitation Excerpt :There also exists a rich literature on the effectiveness of microfinance initiatives in encouraging microenterprise initiatives, with Panjaitan-Drioadisuryo and Cloud (1999), Khandker (2005), Chemin (2008), Tedeschi (2008) and Bateman and Chang (2012) being a select sample of the literature. On the other hand, for the labor market, while the presence of surplus labor has been long recognized (Lewis, 1954), and agricultural activities and household operated microenterprises are known to absorb the surplus labor leading to disguised unemployment (Robinson, 1936; Campbell & Ahmed, 2012), the role of such labor market conditions on the decision to engage in microenterprises is relatively sparse with House (1984), Blau (1985), Peattie (1987); Kelley (1994), Günther and Launov (2012) being notable exceptions. These studies mostly find that individuals adjust between self-employment and formal employment depending on the labor market situation.
Public policies promoting the informal sector: Effects on incomes, employment and growth in Burkina Faso
2021, Journal of Policy ModelingCitation Excerpt :Therefore, taking into account the possibility of competition between formal and informal sectors, Roy (2006) demonstrated that subsidies granted to the informal sector would be ineffective in rising the incomes within that sector subject to certain conditions such as imperfect substitution between informal products and formal goods and the market saturation. Indeed assuming imperfect substitution between the informal-based goods and the formal-based goods, Kelley (1994) provided evidence that strategies designed to promote the informal sector lead to a reduction of the aggregate output and the incomes of informal producers in the context of Peru. Banerji and Jain (2007) use also an analytical framework based on competition between formal and informal but in which the informal sector is supposed to produce quality goods less than those in the formal sector.
The Serengeti ecosystem—Burden or bounty?
2017, Journal of Policy ModelingCitation Excerpt :For example, an earlier survey by Devarajan (1988) reviews several CGE applications to exhaustible natural resources and taxation, with special focus on the impact of taxation and the search for an optimal tax. Kelley (1994) explores the macroeconomic implications of the behavior of the informal sector, which is characterized as labor intensive, with producers receiving products rather than wages and paying no taxes. Xie and Saltzman (2000) construct a CGE model to treat environmental problems, such as pollution and abatement.
Equilibrium implications of fiscal policy with tax evasion: A long run perspective
2012, International Review of Law and EconomicsCitation Excerpt :The second line of analysis addresses dual labor market (i.e. Busato and Chiarini, 2004; Conesa, Diaz-Moreno, & Gald on Sanchez, 2002; Conesa Roca, Diaz Moreno, & Gald on Sanchez, 2001; Russo, 2008). In the literature, other theoretical studies linking the informal sector to the macroeconomy include Kelley (1994), Loayza (1996), and Ihrig and Moe (2001, 2004), among the few. In particular, Kelley investigates the macroeconomic implications of the informal sector using a multi-sector computable general equilibrium model for Peru for 1985.
Illicit exploitation of natural resources: The forest concessions in Brazil
2010, Journal of Policy ModelingThe informal sector and tax on employment: A dynamic general equilibrium investigation
2008, Journal of Economic Dynamics and ControlCitation Excerpt :A simple aggregated Social Accounting Matrix with three production sectors, three consumption goods, and a representative household has been constructed based on National Accounts, employment and consumption statistics for the year 2000 (TURKSTAT, 2002). To estimate the size of informal sector output, the procedure introduced in Kelley (1994) was followed. However unlike Kelley, instead of unpaid employment as a proxy for informal employment, uninsured non-agricultural employment is taken as a proxy in this study.17
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The author would like to thank Bill Gibson, Robert Cruz, Maria Willumsen and the anonymous referees of the journal for valuable comments on earlier draft of this paper.