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Lurking in the cities: Urbanization and the informal economy

Lurking in the cities: Urbanization and the informal economy

Elgin, Ceyhun and Oyvat, Cem (2013) Lurking in the cities: Urbanization and the informal economy. Structural Change and Economic Dynamics, 27. pp. 36-47. ISSN 0954-349X (doi:10.1016/j.strueco.2013.06.003)

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Abstract

This study investigates the empirical relationship between the level of urbanization and size of the informal economy using cross-country datasets proxying GDP and employment shares of urban informal sector. Our estimation results indicate that there is an inverted-U relationship between informality and the level of urbanization. That is, the share of the informal sector grows in the early phases of urbanization due to several pull and push factors; however, it tends to fall in the latter phases. We also show that factors like level of taxes, trade openness, and institutional quality tend to affect the size of the informal economy.

Item Type: Article
Uncontrolled Keywords: urbanization, informal sector, Kuznets curve, panel data
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
Faculty / Department / Research Group: Faculty of Business
Related URLs:
Last Modified: 14 Oct 2016 09:32
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
URI: http://gala.gre.ac.uk/id/eprint/13372

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