Eurasian Economic Review

, Volume 9, Issue 2, pp 221–237 | Cite as

Informal economies around the world: measures, determinants and consequences

  • Ceyhun ElginEmail author
  • Ferda Erturk
Original Paper


This paper aims to present a comprehensive survey of the literature on the economics of informality. First, we focus on studies that aim to provide measures of informality using different methodologies. Next, we review empirical and theoretical studies focusing on the determinants as well as effects of informality. Finally, we conclude by summarizing the main findings of the literature, evaluate several policy recommendations based on our review as well as suggest some future research directions. Even though the literature on informality is growing at an increasing rate, future research efforts are very much needed, both on the theoretical and empirical side. Efforts have to be made to improve measurement of informal sector size as well as developing theoretical mechanisms for determinants and effects of informality that can be supported by empirical analysis.


Informal sector Shadow economy 


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© Eurasia Business and Economics Society 2018

Authors and Affiliations

  1. 1.Department of EconomicsBogazici UniversityIstanbulTurkey
  2. 2.Department of EconomicsUniversity of MarylandCollege ParkUSA

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