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Informal labour and credit markets: a survey

Batini, Nicoletta, Kim, Young-Bae, Levine, Paul and Lotti, Emanuela (2010) Informal labour and credit markets: a survey , New York, US International Monetary Fund 42pp. (IMF Working Papers, 10/42).

Record type: Monograph (Working Paper)


This paper reviews the literature on the informal economy, focusing first on empirical findings and then on existing approaches to modeling informality within both partial and general equilibrium environments. We concentrate on labour and credit markets, since these tend to be most affected by informality. The phenomenon is particularly important in emerging and other developing economies, given their high degrees of informal labour and financial services and the implications these have for the effectiveness of macroeconomic policy. We emphasize the need for dynamic general equilibrium (DGE) and ultimately dynamic stochastic general equilibrium (DSGE) models for a full understanding of the costs, benefits and policy implications of informality. The survey shows that the literature on informality is quite patchy, and that there are several unexplored areas left for research.

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Published date: 2010
Keywords: informal economy, labour market, search-matching models


Local EPrints ID: 174527
PURE UUID: 223cc6c0-f152-484d-9a6c-c780c074ff65

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Date deposited: 14 Feb 2011 13:51
Last modified: 18 Jul 2017 12:11

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Author: Nicoletta Batini
Author: Young-Bae Kim
Author: Paul Levine
Author: Emanuela Lotti

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