Abstract
I review and discuss definitions of informal sector introduced by social scientists over the last half century. I describe how informal institutions, informal markets, and their participants’ activities form together the informal sector. I provide insight into the difficulties in defining informal sector from a judicial point of view. I discuss causes and consequences as well as economic costs and benefits of the informal sector. Finally, I provide a brief analysis of the existing econometrics methods in measuring its size.
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Further Reading
Discussions on further aspects of the informal sector can be found in the following publications:
Bajada C, Schneider F (2005) Size, causes and consequences of the underground economy: an international perspective. Ashgate Publishing Company, Aldershot
Chaudhuri S (2010) Revisiting the informal sector: a general equilibrium approach. Springer, New York/London
Thomas JJ (1992) Informal economic activity, LSE, handbooks in economics. Harvester Wheatsheaf, London
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Hatipoglu, O. (2019). Informal Sector. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7753-2_251
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