The Long Shadow of Informality: Challenges and Policies

The Long Shadow of Informality: Challenges and Policies
ISBN-10
1464817545
ISBN-13
9781464817540
Category
Business & Economics
Pages
350
Language
English
Published
2022-02-09
Publisher
World Bank Publications
Authors
Shu Yu, Franziska Ohnsorge

Description

A large percentage of workers and firms operate in the informal economy, outside the line of sight of governments in emerging market and developing economies. This may hold back the recovery in these economies from the deep recessions caused by the COVID-19 pandemic--unless governments adopt a broad set of policies to address the challenges of widespread informality. This study is the first comprehensive analysis of the extent of informality and its implications for a durable economic recovery and for long-term development. It finds that pervasive informality is associated with significantly weaker economic outcomes--including lower government resources to combat recessions, lower per capita incomes, greater poverty, less financial development, and weaker investment and productivity.

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