Government Effectiveness and Regional Variation in Informal Employment

Erik Jonasson (1)

1 Economics

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 the probability of a worker being employed informally is lower in regions with better governance and higher average education.

Mots clés: Social Sciences & Humanities

Domaines: Sciences de l'Homme et Société

Erik Jonasson. Government Effectiveness and Regional Variation in Informal Employment. The Journal of Development Studies, 2012, 48 (04), pp.481-497. ⟨10.1080/00220388.2011.615922⟩. ⟨hal-00815560⟩