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TRADE LIBERALIZATION AND INFORMALITY: NEW STYLIZED FACTS

Marco Fugazza () and Norbert Fiess

No 43, UNCTAD Blue Series Papers from United Nations Conference on Trade and Development

Abstract: The relationship between trade liberalization and informal activity has not received the attention, whether theoretical or empirical, that it may deserve. The conventional view posits that trade liberalization would cause a rise in informality. This paper uses three different data sets to assess the sign of the relationship. Empirical results provide a mixed picture. Macro-founded data tend to produce results supporting the conventional view; micro-founded data do not. Empirical results also suggest that while informal output increases with deeper trade liberalization, informal employment falls.

Date: 2010
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Citations: View citations in EconPapers (27)

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Working Paper: Trade Liberalisation and Informality: New stylized facts (2008) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:unc:blupap:43

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